Homosexuality in Buddhism is a very complex issue, even more so than in other major religions. While it would wrong to say that Buddhism is opposed to homosexuality, it would also be misleading to say that Buddhism is openly welcoming of homosexuality. Since there are many schools of Buddhism, there are also different views of homosexuality in Buddhism.
A Buddhist does not discuss issues of right and wrong and it would be very unusual for a Buddhist to tell others how to behave. Instead, Buddha encouraged people to introspect and find truth for themselves (even if it meant disregarding his teaching) and to put it into practice for themselves:
"Do not believe in anything simply because you have heard it. Do not believe in anything simply because it is spoken and rumoured by many. Do not believe in anything simply because it is found written in your religious books. Do not believe in anything merely on the authority of your teachers and elders. Do not believe in traditions because they have been handed down for many generations. But after observation and analysis, when you find that anything agrees with reason and is conducive to the good and benefit of one and all, then accept it and live up to it."
Buddha placed a great emphasis on demonstrating compassion for all life and all people. It doesn’t matter who it is, or what has been done. No action is ever called "right" or "wrong", but rather intention and outcome is considered in the context of a whole. For example, in Zen, there are even stories of teachers behaving suddenly and violently in unexpected ways in order to impart enlightenment on their students.
However, there are Buddhist laws with regard to sexual conduct which are enforced in most monasteries. Sexual desire, regardless of which sex it is for, is still a desire, and according to Buddhism desire leads to suffering and so it is to be avoided. Therefore, in order to keep the body and mind pure, monks do not engage in sexual acts of desire. The principle of right mind and right conduct applies to laypeople as well, but obviously this does not necessarily translate into abstinence.
There is no answer, then, to the question, "Is homosexuality outlawed in Buddhism?" Still, it would not be surprising to see homosexuals expelled from Buddhist clergy or frowned upon, though this should not be construed as a condemnation of homosexuality.
