Pope Francis says gay people should not be judged or marginalised.
Speaking to journalists on the papal aircraft on his return from World Youth Day celebrations in Brazil, the pontiff said gay clergymen should be forgiven and their sins forgotten.
When asked about homosexuality and the church, Pope Francis said "if somone seeks the Lord in good faith, who am I to judge?".
Vatican observers say his comments are among the most "compassionate" towards gay people by any pontiff.
Francis was responding to reports that a trusted aide was involved in an alleged gay tryst a decade ago. He said he investigated the allegations according to canon law and found nothing to back them up. But he took journalists to task for reporting on the matter, saying the allegations concerned matters of sin, not crimes like sexually abusing children.
And when someone sins and confesses, he said, God not only forgives but forgets.
"We don't have the right to not forget," he said.
Pope Francis also appeared to open the door towards women having a bigger role in the Church; however he said the "door had been closed" on women becoming priests.