The decision marks the first time since Maryland's modern government was formed three decades ago that the panel has not confirmed a governor's choice to head an agency.
The 10-9 vote against Buhl came after a lengthy hearing in which the nominee pleaded with senators to give her a chance even as the state's environmental community warned she was not qualified to lead the agency charged with protecting the state's air and water.
"I believe if she was confirmed, agriculture and marine life would not have an even playing field," said Senate President Thomas V. Mike Miller, who joined nine other Democrats in opposing Buhl. "It would be tilted toward business."
The vote embarrassed Ehrlich, who personally lobbied committee members to support Buhl for the Maryland Department of the Environment position. Before the hearing, the governor and his staff believed they had the votes.
Despite the committee's decision, Ehrlich and Republican senators vowed last night to bring the nomination to the full Senate, setting the stage for a divisive showdown this week. The nomination goes to the Senate with an unfavorable recommendation.
Administration officials said they were outraged by the action and warned it could spell the end of the governor's calls for bipartisan cooperation.
"We were very disappointed," said Larry E. Hogan, the governor's appointments secretary. "We thought it was unfair, very partisan, unprecedented, and it was frankly disgraceful."
Ehrlich adviser Martin G. Madden, a former state senator, said the administration will work feverishly in the next few days. With 14 Republicans in the 47-member Senate, Buhl needs 10 Democrats.
Madden said the reasons the committee gave for rejecting Buhl were "shallow, transparent and simply not persuasive for any fair-minded individual."
But Senate Democrats and environmental groups appeared to be firm in their opposition.
"Is this lady qualified? Yes, she is qualified to be secretary of economic development or tourism secretary," Miller said. "She is not qualified - as a former attorney with Chrysler Corporation - to be Maryland's secretary of the environment."
Buhl is a former midlevel administrator in the Michigan Department of Environmental Quality, an agency roundly criticized by environmentalists for what they perceive as lax enforcement of regulations.
Before that, she was a corporate attorney for Chrysler. In the mid-1980s, she was an attorney at the U.S. Environmental Protection Agency.
In trying to win confirmation, Buhl has struggled between distancing herself from Michigan's environmental policies - which were unpopular with many environmentalists - while demonstrating she held enough authority there to make her qualified to lead Maryland.
The head of the Maryland department oversees 1,100 employees and administers the state's pollution-enforcement programs. In her job in the Detroit area office of Michigan's department, Buhl said yesterday, she directly supervised about a dozen employees.
Buhl's nomination suffered a crucial blow last week when the state's leading environmental groups joined to oppose her because they believed Ehrlich could have selected someone more familiar with Maryland's challenges.
Sen. Brian E. Frosh, a Montgomery County Democrat and environmental activist, led the effort to defeat her last night.
Like a lawyer cross-examining a hostile witness, Frosh grilled Buhl on her qualifications, knowledge of environmental issues and ties to Michigan's agency under the state's former governor, John Engler.
"On policy after policy and action after action, that department was harmful to Michigan's environment," Frosh said.
Buhl said she had worked to improve wastewater treatment plants, eliminate sewage overflows, prevent loss of wetlands and obtain funding to replace outdated septic tanks.
The nominee also described her work as chairwoman of a nonprofit group that raised more than $4 million to preserve Higgins Lake in northern Michigan. "I absolutely understand the connection Marylanders feel to the bay," she said.
But Buhl said she shared Ehrlich's belief that Maryland's agency needs to be more attuned to the business community, which felt former Gov. Parris N. Glendening's administration was too hard on it.
"There are times you want to use the enforcement stick and times you want to reduce behavior and I think we ought to move toward the latter," Buhl said. "I think there are other groups besides environmental groups who want to protect the environment. ... We need to find balance."
Terry J. Harris, executive director of the Baltimore-based Cleanup Coalition, spoke on behalf of the 10 environmental groups opposed to Buhl.
"The nominee has had some experience representing the regulated community, but has had nominal experience managing environmental programs on behalf of state and federal governments and no experience advocating environmental protection," Harris said.
It appears the administration can owe Buhl's loss to Sen. Ulysses Currie, a Prince George's County Democrat. Currie - chairman of the Budget and Taxation Committee - said he switched his vote at the last moment because he was unhappy with Buhl's answers to his questions about why garbage transfer stations are often put in African-American communities.
Sun staff writers Michael Dresser and David Nitkin contributed to this article.