Protesters dressed in white and holding placards with the slogans including "Stand forward for the next generation's happiness" packed a street outside the parliament, where a committee was debating the issue.
They shook their hands in the air and gave the thumbs-down as they watched a live stream of the committee meeting on a big screen.
Supporters of gay rights are more hopeful than ever that same-sex marriage will soon become a reality under the pro-gay rights Democratic Progressive Party (DPP), which is in control of parliament for the first time.
While Taiwan is considered progressive on many issues, its roots in Confucianism translate into a strong sense of adherence to traditional values such as family loyalty and social hierarchy.
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David Tseng, spokesman of the rally's organiser, The Happiness of the Next Generation Alliance, said that while the group supported equal rights for same-sex partners in certain areas, marriage should only be between a man and a woman.
"Now they want to amend the law to do away with the 'father' and 'mother' altogether," he told AFP.
Tseng also called for a referendum on the issue, criticising the absence of public participation in drafting the bills.
Taiwan is one of the region's most forward-thinking societies when it comes to gay rights, but progress on marriage equality had been stagnant, because of resistance from the Kuomintang (KMT) party, which dominated politics for decades before being unseated by the DPP in May.
President Tsai Ing-wen has also openly supported marriage equality and said she would respect any decision reached by parliament.
"Only a heterosexual marriage can create the possibility of bearing children, and only then can we sustain the nation's next generation," said Wang Tzu-hao, a pastor representing the group.