Granite Construction wanted to build the quarry in an area considered sacred by the Pechanga Band of Luiseno Indians.
The commission voted 4-1 to deny the company to build the 135-acre quarry. The vote drew applause from most of the 250 people who attended the two-hour meeting in Riverside. Dozens present wore bright orange T-shirts reading "Save Our Southwest Hills."
Supporters say the quarry would bring much-needed jobs to the area.
However, in addition to the tribe's concerns, commissioners also question the effect on traffic and air quality.
The commission still has to take a final vote to formally deny Granite's application to build the Liberty Quarry on the backside of an oak-covered mountain overlooking Temecula.
The company planned to dig 1,000 feet deep and annually churn out up to 5 million tons of aggregate - the sand and gravel used in building materials for everything from concrete to roads to dams.
Granite will appeal the commission's decision to the county board of supervisors, said Gary Johnson, the company's aggregate resource manager.
The Associated Press contributed to this report.