Introduction <p>Prejudice toward sexual minorities remains pervasive despite many nations gravitating toward liberalism. Religion continues to be a significant predictor of prejudice against homosexuality, even in more liberal countries. This study contributes to the existing literature on sexual prejudice by examining the roles of religiosity, happiness, and democracy at both individual and country levels to better understand the complex nature of sexual prejudice toward homosexuals.</p> Methods <p>Using a joint dataset from the European Value Survey and World Values Survey collected from 34 European countries between 2017 and 2022 (<i>N</i> = 43,249), we tested the role of religiosity, democratic values, and happiness as potential predictors of sexual prejudice toward homosexuals.</p> Results <p>Results demonstrate a strong relationship between religiosity and sexual prejudice, while democratic values and happiness were associated with greater acceptance of homosexuality. Further moderation analysis revealed significant variation in tolerance toward homosexuals. Specifically, the acceptance of homosexuality among religious individuals is associated with their levels of happiness and support for democratic values.</p> Conclusions <p>The findings highlight the importance of a multi-level approach to understanding the complexities of prejudice against homosexuals.</p> Policy Implications <p>The evidence can inform proactive measures to prevent discrimination against sexual minority groups and enhance their legal protection.</p>