A total of 76.1 percent voted against the proposals for the tiny Alpine principality, where the ruling Liechtenstein family has a net worth estimated by Forbes at $5 billion.
Crown Prince Alois, who was appointed acting head of state by his father Hans-Adam II in 2004, had threatened to quit if the referendum passed and eliminated the veto right which is enshrined in the constitution.
The prince on Sunday welcomed "a clear result which (is) a good base for meeting future challenges facing the principality".
His father said in a statement that he was "happy and grateful that a large majority of the population wanted to continue the 300-year-old effective partnership between the people and the royals."
Voter turnout was high at 82.9 percent.
A number of voters who rejected the proposals expressed their satisfaction on the Facebook page "For God, the prince and the country".
"There, it's very clear for the second time this century," wrote Micha Tarnutzer, referring to a previous attempt to modify the constitution in 2003.
"I hope the 23.9 percent who supported abolishing the veto right have taken the result into account and won't try this again in nine years."
The movement to limit the royal powers first gained steam last year, when Alois, a 43-year-old father of four, threatened to veto a referendum legalising abortion.
A committee of supporters of the abolition, who campaigned with the slogan "Yes, so that your voice counts" said it was "disappointed" by the result.
"We had hoped that this fundamental right would have greater approval," the committee said in a statement.
With some 36,000 inhabitants, the bucolic monarchy sandwiched between Austria and Switzerland enjoys one of the highest living standards in the world thanks to its industrial and financial sectors.