The supermarket was praised for "going a lot further than other organisations" by training its staff, including customer-facing ones, on LGBT issues at this year's LGBT Awards.
It pipped corporate heavyweights Barclays, Goldman Sachs and Citi to the award, which was judged by a panel that included one of the first openly lesbian MPs and shadow business secretary Angela Eagle.
Asda said the award demonstrated the "commitment and passion" of its dedicated staff.
Nick Green, the supermarket's senior director for talent and capability said: “It was an honour to be shortlisted at the British LGBT Awards but to win Employer of the Year is a huge achievement for Asda, and one that we are extremely proud of.
"The reason we have won this award isn’t because of our corporate policy, it is because of our people. This award demonstrates the commitment and passion our people have to diversity and inclusion, and this hard work will continue."
Lloyds Banking Group, meanwhile, was gifted with the LGBT Network Group of the Year award for its network of over 3,000 queer employees.
It saw off rivals Tesco and PwC for the prize.
Winners of the British LGBT awards included: