Wednesday's vote will not automatically become law, but the government says it will take the results into account when it draws up legislation later in the year.
The debate examined 10 options for proposed laws to reform the chamber, including splitting the chamber equally between elected and appointed peers.
Blair himself voted in favour of a 50-50 split but did not take part in the other votes, his office said.
The British House of Lords, which emerged as a distinct body around 700 years ago, does not make laws but has the power to amend legislation, subject to the consent of the House of Commons, or to delay the passage of legislation for a limited period.
Of the 65 nations with a two-chamber parliament, 46 elect most or all of their representatives, according to James Graham, a campaigner for peers to be elected.
Graham also says that of the 19 countries, including Britain and Canada, that do appoint most or all of their second chamber members, only five are established democracies.
Jack Straw, a cabinet minister and former foreign secretary, said before the vote: "The choice, in my judgment, is stark: change or wither away."
Straw had proposed a 540-seat house, a reduction of around 200 seats, and the removal of the remaining 92 hereditary peers.
Some fear an entirely elected House of Lords would present a rival to the supremacy of the House of Commons, while others say an entirely appointed chamber would be open to charges of cronyism.
The Lords have clashed with the Commons on several occasions in the past.
Their powers were originally curtailed after a clash with the then finance minister David Lloyd George over his budget of 1911; he went on to serve as prime minister of Britain between 1916-1922.