Even as he termed the presence of the gay lobby inside the Vatican as a 'serious problem', Pope Francis said that he had no right to judge gays who pray to God.
The remarks to journalists as he flew back to Rome from a high-profile trip to Brazil appeared to be more conciliatory towards homosexuals than his predecessor Benedict XVI.
"If someone is gay and seeks the Lord with good will, who am I to judge?" the pope asked.
"The problem is not having this orientation, it is lobbying. That's the most serious problem."
The pope had admitted in June that there was a "gay lobby" in the Vatican's secretive administration, the Roman Curia, according to a Latin American Catholic website.
It followed earlier Italian media reports claiming that a secret report by cardinals investigating Vatican leaks included allegations of corruption and blackmail attempts against gay clergymen, and on the other hand, favouritism based on gay relationships.
Francis also fielded questions about Battista Ricca, who was appointed by the pontiff to a key position at the troubled Vatican bank but is embroiled in allegations that he had gay relationships with male prostitutes.
The pope said he had ordered a "brief investigation but we found nothing on him".
"I have not seen anyone at the Vatican who is registered as gay on his identity card," he said, adding however: "We acknowledge that there are (gays)."
Nevertheless, "the catechism of the Catholic Church says clearly that we must not marginalise these people who should be integrated in the society," he added.
Gays and lesbians should be "treated with respect, compassion and sensitivity, without discrimination," he said.
The Italian weekly L'Espresso this month reported that Ricca had gay relationships during his time at the Vatican embassy of Montevideo in Uruguay as well as an affair with a Swiss guard which ultimately saw him sent back to Rome in disgrace in 2010.
Because of an internal bid to cover up Ricca's activities, Francis apparently was unaware of his past before appointing him as his personal representative at the scandal-hit bank this year.
Gay rights groups had voiced hope on Francis's appointment that the Argentinian pope would be friendlier to homosexuals than his predecessor.
Benedict had angered the gay community with his suggestion in 2008 that homosexuality was as much of a threat to the survival of the human race as climate change.
Also Monday, the pope said John Paul II, a beloved predecessor, would not be canonised in December as previously mooted.
He said the pencilled-in date of December 8 would not suit pilgrims of modest means travelling to Rome by bus from John Paul II's native Poland.
The 78-year-old pontiff hailed the Polish pope as a "great missionary, a Saint Paul."
Francis also said Monday he was moving forward with reforms of the Vatican adminstration, or Curia, saying he faced no "resistance" while recognising that the Holy See was embroiled in scandals.
"There are saints in the Curia, loyal people," he said. "And if there's resistance, I haven't seen it yet."
As Latin America's first pontiff, he was given a rock star's welcome on Rio de Janeiro's legendary Copacabana beach, with a sea of faithful waving flags, dancing and chanting "long live the pope!" on the crescent-shaped shoreline.
Wrapping up his first trip abroad since his election in March, the head of the world's 1.2 billion Roman Catholics hammered home his plea for young believers gathered for World Youth Day to "go and make disciples of all nations".
He waved away security concerns, saying: "A bishop and his people cannot be separated by an armoured vehicle."
"I prefer taking a risk," he said.
Brazil is the world's biggest Catholic country but its flock has dwindled while Evangelical churches have boomed. Almost 65 percent of the population was Catholic in 2010, sharply down from 92 percent in 1970, according to the census.
The pope announced that Krakow, Poland, the homeland of the late John Paul II who started the World Youth Day tradition, will host the next gathering in 2016.