After "careful consideration", the US Department of Defense announced "there won't be an exception made this month" for the pride flag to be displayed at US military bases.
Although there are no plans for a formal review to take place, Pentagon spokesman John Kirby said the old policy was looked at by the Biden administration in the lead up to June, which is Pride month to "see if we felt it was still applicable and still needed to be applicable".
Mr Kirby went on to say "this in no way reflects any lack of respect or admiration for people of the LGBTQ+ community, personnel in and out of uniform who serve in this department".
Instead, the decision was about "the potential for other challenges that could arise" from granting an exception for the flag to be on display throughout this month.
The announcement by Mr Kirby maintains a policy set by Donald Trump in July 2020 that limited the type of flags that could be flown on bases.
The policy was part of an effort to ban the display of the Confederate flag and other potential hate symbols on bases during last summer's racial tensions.
In a proclamation earlier this week to mark the start of Pride month, President Biden said nearly 14% of his 1,500 agency staff identify as LGBTQ+.
The US President also said he was "honoured" by the service of Transportation Secretary Pete Buttigieg, who is the first openly LGBTQ+ person to serve in the US Cabinet, and Assistant Health Secretary Dr Rachel Levine, who is the first openly transgender person to be confirmed by the Senate.
In January, President Biden signed an order reversing a defence policy that largely barred transgender individuals from serving in the military.
It overturned the ban announced by Donald Trump in 2017, which Mr Biden labelled "discriminatory".