In a historic 10-4 decision the Martha’s Vineyard Commission voted Thursday night to deny the Meeting House Way subdivision, formally rejecting the Island’s largest proposed development in decades and framing the occasion as a watershed moment for both the commission and the Vineyard.

“This has been, for me, just about the most difficult DRI I have had to work on,” said commission chairman Doug Sederholm after the vote was taken. “It is wrenching. And we have a tremendous responsibility.”

The vote concludes a protracted, nearly two-year review process for the proposed 54-acre, 29-lot Edgartown subdivision, which has gone through multiple redesigns.

Earlier in the week on Monday, a key commission subcommittee informally recommended turning down the most recent version of the project. Developers went ahead with the formal vote, making Thursday’s decision unsurprising but nonetheless momentous. The commission has seen few large development plans since the 1980s and 1990s when Thursday night meetings often ran long and late with one subdivision plan after another during a time when the Island was under extreme pressure for development.

In the roll call vote, commissioners Linda Sibley, Joan Malkin, Kathy Newman, Robert Doyle, Ernie Thomas, Jim Vercruysse, Fred Hancock, Christina Brown, Ben Robinson and Mr. Sederholm all voted to deny the project. Commissioners Clarence A. (Trip) Barnes 3rd, James Joyce, Richard Toole and Josh Goldstein voted in favor of the proposal.

The denial sets up a potential legal battle for the commission if the applicants, Utah-based developers Douglas K. Anderson and Richard G. Matthews, decide to appeal the decision in superior court.

Deliberations Thursday were penetrating and at times emotional as commissioners weighed the project’s benefits and detriments. In the end there was consensus that despite substantial improvements to the plan with respect to energy, nitrogen, affordable housing, density, home size and even layout, a more intangible issue tipped the balance.

“To me, it fails on character,” said longtime commissioner Linda Sibley. “It is anathema to the character of the Vineyard. And particularly to that area.”

The notion of character has been a theme throughout the project’s quartet of hearings, more than 50 letters of correspondence, and again during deliberations Thursday night, forcing the unique regional planning body to re-examine its own mission as set by an act of the state legislature in 1974.

At the outset Mr. Sederholm read from Chapter 831, the state enabling legislation that describes the commission’s chartered responsibility to preserve the unique natural, historical, ecological, scientific and cultural characteristics of Martha’s Vineyard.

Commissioners then spent the next hour and a half agonizing over the language in the context of the Meeting House Place development’s benefits and detriments. The first asks commissioners to determine whether the project is essential and appropriate.

“I would have a hard time saying that this development was essential, in any stretch of the imagination,” said commissioner Fred Hancock. “I think, what we are essentially looking at, is a development for millionaires, when we look at the numbers involved in this process. And I don’t think we want to mortgage our patrimony of the Island for that. I would say it is not essential or appropriate.”

Commissioner Joan Malkin went further.

“I don’t think there is any need for the kind of housing that is proposed,” Ms. Malkin said. “Not only do I think it is not essential, I think it is inappropriate.”

Ms. Sibley called the development “suburban” and an inappropriate use of the land. Ms. Malkin criticized the 3,800-square-foot maximum home size set by the developers. Ben Robinson noted that the homeowner’s association would require a two-car garage minimum. Ernie Thomas lamented the weak energy requirements. And Kathy Newman questioned whether the project’s proposed 14 deed-restricted, $400,000 town homes actually constituted affordable housing.

Commissioner and governor’s appointee Michael Kim said that despite creative ideas and well-meaning offers, the project missed the mark.

“It just seems like maybe the Red Sox payroll,” Mr. Kim said. “For that amount of money, we deserve better pitching. For the amount of money they have committed to invest, they could have easily made the case — and proven it — that they could have been part of the solution. But they missed.”

A vocal minority offered support for the project. Commissioners James Joyce and Trip Barnes countered the others on nearly every issue, praising the project’s ingenuity and benefit to the local economy. They said the project would constitute a significant property tax windfall for the Edgartown, and Mr. Joyce said the development would be a “bonanza” for the sewer commission.

“Nobody’s talking about the boom to the economy, a shot in the arm,” Mr. Barnes said. “Boy this could help people. If we could do something to put this thing through, we could be doing a bunch of working people a favor.”

Mr. Joyce criticized other commissioners for opposing the project when it closely followed the commission’s own guidelines — pushing the discussion beyond the details and reviving an age-old debate around the controversial role of the commission on the Island.

“I think what the group of you are really saying, is that you don’t want any more housing of any kind on this Island and you want to pull the drawbridge up right now,” Mr. Joyce said. “And that’s been going on since I came here 40 years ago.”

With some hesitation, commissioners Richard Toole and Josh Goldstein joined the no side of the vote. Mr. Goldstein said he felt the commission needed to seriously consider the ramifications and precedent of denying a project that closely followed the guidelines. Mr. Toole felt similarly, and said in prepared remarks that the vote posed an existential threat to the commission itself.

“I fear for the continued existence of the Martha’s Vineyard commission if we overreach, and continue to up the ante,” Mr. Toole said. “Are we saying no to new, creative development while blindly watching the existing buildable lots built upon and or expanded upon, affordable only to the wealthy? This is a character issue.”

Ms. Sibley agreed that it was a character issue. But she disagreed on everything else, arguing that it was not the commission that had moved the goal posts on the applicants, but a world — and Island — that had changed drastically over the past 40 years, in turn making the commission, and its original mandate of preserving the unique characteristics of the Vineyard, more important than ever. Her view carried the evening.

“I think it’s [unfair] to say that we’ve moved the goalposts,” Ms. Sibley said. “The analogy I prefer is that of a lifeboat. At some point, you add more people, and the boat sinks, and everything is gone. And I think that we are seeing that the character of the Vineyard is under even more threat than it was four decades ago when the commission was created. We are in danger of giving up. That’s it.”