Government figures showed that 76.1 per cent of voters, or 11,629 people, rejected the initiative.
The referendum was called after Prince Alois, 43, threatened to veto moves to legalise abortion in a referendum last year.
The present law allows pregnancy termination only in cases where the mother's life is at risk. Prince Alois is a devout Catholic and his wife, Princess Sophie of Bavaria, founded a charity encouraging women with unwanted pregnancies to bring the fetus to term.
The Prince angered some residents when he threatened to wield his veto should the electorate support a campaign to legalise abortion. Among Europe's royals, Liechtenstein's are the most politically powerful. The Prince appoints the Prime Minister and can veto any legislation and dismiss the Government.
Before the referendum, a former Prime Minister, now lawyer, Mario Frick, said "it would be good if the people get the last say, because under the current situation the country looks a bit backward".
But Frick's appeal fell on deaf ears.
"It was a dreadful proposal. If we didn't have the Prince, our country would be a lot worse off," said Christina Buechel, 60, who voted no in the referendum.
Sandwiched between Austria and Switzerland, Liechtenstein covers a mere 160sq km, making it the sixth smallest country in the world.
The family has ruled the principality, once a Roman province, under a decree granted in 1719 by Charles VI, the Holy Roman Emperor.
Among the vast portfolio of assets, the Liechtenstein royal family owns LGT, the largest family-owned private wealth and asset manager in Europe. Forbes magazine estimates Prince Johannes Adam's wealth at over US$4.5 billion ($5.7 billion) including an art collection of some 1600 works.
Thanks to a banking industry which flourishes under secrecy laws that make Switzerland's look transparent by comparison, Liechtenstein's 36,000 residents enjoy the world's second-highest per capita income after Monaco.
In 2008, Prince Alois accused Germany of an "attack" on his country after discovering its intelligence service had paid €4 million ($6.4 million) to a former Liechtenstein bank employee in return for details of Germans with accounts in LGT bank.
In the mid-1950s, the principality briefly acquired a wider reputation in a Peter Sellers movie called The Mouse That Roared. In the film it became the "Duchy of Grand Fenwick", a rundown feudal ministate that declares war on the United States after its wine export, the Pinot Grand Fenwick, is ruined by a knockoff called Pinot Grand Enwick. Washington is not even aware that it is at war because nobody there has heard of Grand Fenwick.
