Mike Overd was arrested last year under the Public Order Act for saying that gay men could be forgiven by God for their sin.
The charge was brought against him following a complaint by civil partners Craig Nichol and Craig Manning, who were walking by arm in arm as Mr Overd preached on Taunton High Street.
They felt that the preacher had singled them out as "sinners" and complained to police, who arrested Mr Overd and charged him with a hate crime.
Mr Overd said he had been intimidated by the whole experience and expressed his disappointment with police for arresting him rather than protecting him.
He was acquitted after the Magistrates concluded that he had not intended to cause harassment, alarm or distress.
Mr Overd said his case "should never have been brought" before the court.
"Christians like me are being harassed," he said.
“Thankfully the magistrates saw the truth of what happened and is happening on a wider scale in our country.
“Something is wrong when Nick Lansley of Tescos can insult Christians by reading out an abusive poem on You Tube about homosexual acts on Christ; Abu Qatada can preach about Jihad and death to the Jews; but the Police arrest me, a Christian preacher who cares deeply for Jesus Christ and the people of Taunton.
"Something has to change and I hope my case will encourage others not to be scared to speak up for Christ.”
Andrea Minichiello Williams, director of the Christian Legal Centre, which defended Mr Overd, said the case was an important victory for free speech.
"We are determined to fight for the freedom to speak and preach the Gospel," she said.
"The Lord Jesus himself spoke directly to sinners; religious speech needs protection as people do not want to hear about ‘sin’ and they try to shut down freedom of speech.”