He vetoed similar embryonic stem cell legislation in July.
His executive order encourages scientists to work with the government to add other kinds of stem cell research to the list of projects eligible for federal funding -- so long as it does not create, harm, or destroy human embryos.
Democrats, focusing on the potential for cures or treatments of Parkinson's, Alzheimer's, and other diseases, made the embryonic stem cell legislation a priority when they took control of the House and Senate in January.
"President Bush won't listen to the more than 500 leading organizations who support the bill, including AARP, the American Medical Association, and the American Diabetes Association, just to name a few," Senate majority leader Harry Reid of Nevada said.
"President Bush won't listen to the 80 Nobel laureates or his own director of the National Institutes of Health, who all support embryonic stem cell research. Most importantly, President Bush won't listen to the overwhelming majority of Americans who call out for stem cell research."
Reid said he would schedule an override vote "very, very quickly," but not until Wyoming selects a temporary replacement for Republican Senator Craig Thomas, who died June 4. Democrats do not have enough votes to override Bush's veto.
Public opinion polls suggest strong support for the research, and it could return as an issue in the 2008 elections.
Republican presidential candidates are split on the scope of federal involvement in embryonic stem cell research. Senator John McCain of Arizona and former New York mayor Rudy Giuliani have broken with Bush, and the GOP's social conservatives, in backing the expansion of federal funding for such research. At the Republican debate May 3, Giuliani said he supports such an expansion with limits, "as long as we're not creating life in order to destroy it, as long as we're not having human cloning."