"This was a pretty shameful day for Washington," Mr Obama said at the White House. "But this effort is not over."
Fifty-four senators backed the plan, but that was six short of the 60-vote hurdle needed to clear the chamber.
Gun rights groups hailed the defeat of the measure, arguing it would violate the right to bear arms.
The proposal, put forward as an amendment to a broader gun bill, sought to widen the current checks to include online and unlicensed gun show dealers.
President Barack Obama is campaigning for tighter gun laws after 26 people died in a school shooting in Connecticut in December.
In remarks at the White House with a family that lost a son in the Newtown massacre by his side, Mr Obama vowed to continue efforts on tighter gun restrictions.
"If this Congress refuses to listen to the American people... then the real impact is going to have to come from the voters," Mr Obama said, calling on those who supported the plan to let their senators know how disappointed they were.
Mr Obama argued those who voted against the Manchin-Toomey plan had been led only by politics.
"Most of these senators could not offer any good reason why we wouldn't want to make it harder for criminals and those with severe mental illnesses to buy a gun."
Meanwhile, former Arizona congresswoman Gabrielle Giffords, a vocal supporter of gun control after she was shot in the head in 2011 while meeting constituents in Tucson, in an attack that killed six people, accused lawmakers of "cowardice".
"These senators made their decision based on political fear and on cold calculations about the money of special interests like the National Rifle Association, which in the last election cycle spent around $25 million on contributions, lobbying and outside spending," Ms Giffords wrote in the New York Times.
The expanded system of background checks, which had been the centrepiece of the president's agenda, was blocked by most Senate Republicans and some Democrats.
The New York Times accuses the Senate of failing Americans, saying for 45 of them the carnage of Sandy Hook Elementary School is a forgotten tragedy.
Commentator Charles Krauthammer tells Fox News in video carried by National Review Online that the amendment would not have stopped Sandy Hook happening.
The Washington Post says the Senate has "misfired badly".
"An inglorious conclusion," is the view of the Huffington Post.
Plans for a ban on assault weapons and high-capacity magazines have already been removed from the gun-control bill, amid lack of political support. Similar measures failed as amendments on Wednesday.
A recent poll by CNN/ORC suggests that 86% of Americans support expanded background checks, but recent AP opinion surveys show support for generally stricter gun laws has dipped from a high of 58% in January to 48%.
Patricia Maisch, a survivor of the 2011 Arizona shooting that killed six people and severely injured former Representative Gabby Giffords, shouted "Shame on you!" from the Senate gallery as the bill was blocked.
The plan was considered as an amendment to a larger gun-violence bill in the Senate. The bipartisan deal was first brokered by Democratic Senator Joe Manchin and Republican Senator Pat Toomey.
On Wednesday, Sen Manchin said allegations by America's top gun lobby group, the National Rifle Association, that the proposal would require checks for sales and gifts between family and friends and lead to a national registry as "a lie".
He said: "Where I come from in West Virginia, I don't know how to put the words any plainer than this: That is a lie. That is simply a lie and anybody who can read knows that is not factual."
Mr Obama also said the gun lobby had "wilfully lied about the bill" and that a vocal minority of gun owners had "intimidated" senators into voting against the plan.
The proposal had exempted transfers between family and friends, and had explicitly banned the justice department from setting up a national gun registry.
Republican Senator Mike Lee of Utah told USA Today he voted against the amendment because it was too vague for law-abiding citizens to understand and too easy for criminals to avoid.
"The plan created more questions than it answered about which types of transfers are lawful without a background check and might ensnare law-abiding gun owners simply exercising their constitutional rights. It also left in place a number of gaps that could easily be exploited by criminals intent on obtaining guns."
In a statement, the NRA hailed the defeat of the amendment.
"As we have noted previously, expanding background checks, at gun shows or elsewhere, will not reduce violent crime or keep our kids safe in their schools," said the statement.
Three other Republicans joined Sen Toomey in backing the plan - Arizona's John McCain, Maine's Susan Collins and Mark Kirk of Illinois.
Democratic Senators Mark Begich of Alaska, Max Baucus of Montana, Heidi Heitkamp of North Dakota and Mark Pryor of Arkansas voted against the measure. Senators Begich, Baucus and Pryor are all seeking re-election next year.
President Barack Obama has lashed out at senators who blocked a bipartisan plan to support expanded background checks on firearms.