San Diego Loyal left the pitch halfway through a USL game against Phoenix Rising after using a homophobic bow.
An aspiring player is believed to have berated openly gay loyalist Collin Martin during the competition while his club is in solidarity with the midfielder.
Despite taking a 3-1 lead at halftime, Loyal returned in the second half and waited for Rising to shoot the ball before deciding to leave the pitch in protest.
"In the first half, a member of Phoenix Rising used a homophobic bow against Collin Martin. In response, we decided to leave in protest," the club wrote on Twitter.
"Last week we made it clear that we do not stand for racism or homophobia. Nothing has changed this week."
Loyal manager and former USMNT striker Landon Donovan was part of the walk-off and debated the decision with Rising coach Rick Schantz.
The Loyal's decision to leave comes less than a week after they lost a point earned in a 1-1 draw with LA Galaxy II after it was revealed that a racist mistake was directed against one of their players.
"We don't even want to realize that we are part of a game in which such actions take place," said Andrew Vassiliadis, chairman of Loyal.
"The loyalty in our name is a symbol of the diversity in our community and as an association we will not stand up for it."
Loyal President Warren Smith added: “If we have learned in the past few months about all the racial injustices that have occurred, we must take action that will have consequences if these matters arise. I am proud of this organization, its owners, its employees, and especially our players who want to take such action. "
The USL has confirmed that they are now investigating the incident Wednesday night.
"We are aware of the alleged use of a homophobic bow in today's game between San Diego Loyal SC and Phoenix Rising FC," a statement said.
"Swear words and abusive languages of any kind have absolutely no place in our society and will not be tolerated in USL games. Investigations are underway to establish the facts surrounding the incident. Further information will be provided as it becomes available."