If upheld, it would have been the nation's first tax-funded, church-run charter school. In recent years, charter schools have proven popular with parents both in major cities and in rural areas, and their numbers would surely have grown if churches or religious groups were free to operate these schools.
The Supreme Court has six conservatives, all of whom were raised as Catholics. And Chief Justice John G. Roberts has written opinions ruling it was unconstitutional discrimination to exclude religious schools from a state's program of vouchers or tuition subsides for children attending private schools.
Religious-liberty advocates appealed to the Supreme Court last year arguing that it was also unconstitutional to exclude churches from sponsoring a state-funded charter school.
But they fell one vote short of majority that could have changed schools nationwide.
Justice Amy Coney Barrett had announced in advance she would not participate in the decision. A former Notre Dame law professor, she was a close friend of law professor Nicole Garnett, who led the drive for faith-based charter schools.
The chief justice sounded uncertain during the oral argument in late April. In the past, he had said states may not discriminate against religious groups, but Oklahoma's law applied only to public schools, not private ones that were religious.
Defenders of church-state separation had argued that charter schools by law were public, not "sectarian" or religious. They urged the court to uphold the laws as written.
Four other conservative justices had signaled they would vote to allow the religious charter school.
On Thursday, the court issued a one-line decision in the Oklahoma case after hearing arguments last month. "The judgment is affirmed by an equally divided Court," and it did not disclose how the eight justices voted. But Roberts was the only conservative who voiced doubt.
The case had also divided officials in Oklahoma. The Catholic bishops of Tulsa and Oklahoma proposed to operate St. Isidore of Seville Catholic Virtual School, and they applied to have it become a state-funded charter school.
A divided state board approved the request. But the state's attorney general, Gentner Drummond, sued and argued the state constitution did not allow for public funds to be spent for churches or the teaching of religion. The state supreme court agreed and blocked the establishment of the new charter school.
Lawyers for the Alliance Defending Freedom appealed to the Supreme Court and argued the state's decision violated the 1st Amendment's protection for the "free exercise" of religion.
Rachel Lase, president of Americans United for Separation of Church and State, applauded the outcome.
"The Supreme Court's stalemate safeguards public education and upholds the separation of church and state," she said. "Charter schools are public schools that must be secular and serve all students. St. Isidore of Seville Catholic Virtual School, which planned to discriminate against students, families, and staff and indoctrinate students into one religion, cannot operate as a public charter school."
While Thursday's split decision is a major setback for religious rights advocates, it does not finally settle the issue of religious charter schools. It's possible, for example, that Justice Barrett may participate in a future case.
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