The InterVarsity Christian Fellowship chapter at the University of Buffalo was recently suspended after asking one of its leaders to resign because of his homosexuality.
Sophomore Steven Jackson told the school newspaper he stepped down as treasurer last month after feeling pressured by his peers to do so because he's gay.
University officials said the group's move was discriminatory.
InterVarsity leaders also have to sign a "basis of faith," affirming their Christian beliefs.
"If your leaders don't agree on your core beliefs, then you are not going to agree or come to an understanding on what you should do as a group," InterVarsity Director for Collegiate Ministries Jim Lundgren told CBN News.
He added that the group should have the right to choose leaders whose beliefs reflect those of the organization.
"We believe we're doing what any Muslim group would want to do on campus, or what any Republican group would want to do, or what a Democrat or a socialist group would want to do, for that matter," he said.
Lundgren believes the university is trying to establish an "all comers" policy, which would prevent official campus organizations from restricting membership on any grounds, including religious beliefs.
The suspension means InterVarsity can't host events on campus or access funds provided by the student association.