The display was also branded "sad" by the Catholic Bishop of Providence in the US state of Rhode Island, Thomas Tobin.
Writing on Twitter, he said: "Just came across this photo of a 'gay nativity' scene - two Josephs dressed in pink watching over the Christ Child.
"How sad that someone believes it's okay (or funny or cool) to impose their own agenda on the holy Birth of Jesus.
An image of the display posted on social media has since been shared thousands of times, prompting strong reactions from some Twitter users.
Albeerta Stan wrote: "I'm a strong defender of the lgbtq [lesbian, gay, bisexual, transgender and queer] community but I can't see how this is anything but mockery of Christians."
While Greg Tonkinson said: "Honestly wondering why it's acceptable, as you see it, to make a mockery of something others believe in?"
Eleanor Lee said: "God will not be mocked.
"These guys can live the life they choose, but to ridicule the faith of so many people is beyond disgusting."
Bishop Thomas added: "Pray for those who did so, for their change of heart, and that Jesus will forgive this sacrilege, this attack on the Christian Faith."