Around 250,000 turn out in two cities in support of a bid to join the UN.
Mainland China and self-ruled Taiwan have faced off since Nationalist forces fled to the island in 1949 following their defeat by the Communists at the end of the Chinese civil war.
The Republic of China under the Nationalists was a founding member when the United Nations was established in 1945.
It was given a seat as one of the five permanent members of the security council, but that position was lost to the mainland in 1971.
Beijing regards Taiwan as part of its territory, and says it will use force if it declares independence.
Beijing and Taipei both claim they are the legitimate government of all China.
Taiwan has been a multi-party democracy since 1996.
Taiwan’s defence ministry says China now has nearly 1,000 missiles aimed at the island.
The US is Taiwan’s major arms supplier and has warned China that any attack would be viewed with “grave concern”.
Taiwan‘s foreign ministry said it regretted Wednesday’s UN decision.
“It was not a surprise that our effort was blocked again, but we have successfully highlighted the issue in the international community.”
David Wang, a ministry spokesmand, said China was “bullying us with all its might in the world”.
Rejecting Taiwan’s bid, Ban Ki-moon, the UN secretary-general, had said it was “not legally possible” for his office to accept a membership application from Taipei.
The assembly’s general committee, which met behind closed doors instead of in public for the first time in years on Wednesday, refused to put Taiwan’s membership on the agenda for discussion during the assembly’s 62nd session.
China and Egypt spoke against it.