The New Room in Bristol allowed Christians at Bristol Pride - a group which organises events where lesbians and gay people are "affirmed unconditionally" - to host a "service of celebration" on Saturday.
Bosses at the landmark, which was built by John Wesley in 1739, told Premier they sought the backing of trustees and local leaders at the Bristol and South Gloucestershire Circuit before granting the booking.
Educational officer Rev Mandy Briggs: "We were approached by the group who were taking part in the Bristol Pride march [on Saturday] and wish to share God's love with everyone who takes part."
"We are allowed to hold appropriate services where trustees have agreed... but I want to stress that we do not marry gay couples and we are not allowed to bless gay marriages".
In a resolution agreed 25 years ago, Methodists affirmed their commitment to "the traditional teaching of the Church on human sexuality", while acknowledging that no one should be barred from the Church on the grounds of sexual orientation.
The New Room said a protest organised by Pastor Dia Moodley of the city's Spirit of Life Church against the Christians at Bristol Pride event was attended by approximately a dozen people.
Sending much love to @NewRoomBristol this morning. Know your service of celebration has much prayer surrounding it this morning. #BristolPride #NowtAsQueerAsMethodists #ChristiansAtPride
— Sally (@Sally_J_Rush) 14 July 2018
Expressing her support for Pastor Moodley, Andrea Williams, the chief executive of Christian Concern said: "The heritage of sound biblical teaching on human sexuality that was faithfully proclaimed by Christian men like John Wesley should be upheld by the church, not torn down.
"Methodism is dear to my heart, and I find it very sad to see buildings intended for the proclamation of the glorious gospel of our Lord Jesus Christ being used to celebrate a sexual lifestyle that He condemned."
Premier has contacted Christians at Bristol Pride for a comment.
Thousands of people attended Bristol Pride on Saturday.
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