Jenna Talackova was one of more than 60 contestants vying for the honor Saturday night. The 23-year-old Vancouver native made the final 12 before being knocked out of the running.
Sahar Biniaz, 26, claimed the crown and will advance to the international Miss Universe competition in December.
The night wasn't a total loss for Talackova. The 6-foot-1 blond beauty was one of four contestants named Miss Congeniality. She didn't win the crown, but she garnered most of the attention during the formal wear and bikini contests, soliciting loud cheering and howls each time she appeared on stage.
Talackova, who underwent a sex change four years ago, was initially denied entry to the pageant because she was born a male. But last month Donald Trump, who runs the Miss Universe organization, overruled that decision.
Miss Universe publicity director Brenda Mendoza has said transgender competitors are now welcome at all of its pageants around the world. But she said it's being left to the individual franchises to determine if the recent policy change is carried out.
The Associated Press contributed to this report.