Rosie decided to come out as a lesbian after learning the plight of a gay couple from Florida who were not allowed to adopt the foster children they were raising. Steve Lofton and Roger Croteau have
several foster children that they wish to adopt. The laws in Florida do not allow for same-sex couples to adopt. Rosie told Diane Sawyer, "I don't think America knows what a gay parent looks like. I am a gay parent."
On December 5, 2006, O'Donnell used a series of ching chongs to imitate newscasters in China. She was criticized for her use of the term, and there was disappointment of her perceived insensitivity when she had fought for gay and lesbian rights and spoken out against homophobia. On December 14, O'Donnell apologized to "those who felt hurt" explaining that "Some people have told me it's as bad as the n-word. I was like, really? I didn't know that." O'Donnell warned that "there's a good chance I'll do something like that again, probably in the next week, not on purpose. Only 'cause it's how my brain works." Time called it a "pseudo-apology". O'Donnell later wrote in Celebrity Detox that "I wish I had been a bit more pure in my public apology."
Rosie started a magazine in 2001, but it was plagued by lawsuits and stopped publishing in 2002.
Rosie was appalled during her trial with her magazine that her partner Kelli was called to testify against her. Married spouses are protected from testifying against each other. Rosie said, "We applied for spousal privilege and were denied it by the state. As a result, everything that I said to Kelli, every letter that I wrote her, every e-mail, every correspondence and conversation was entered into the record," O'Donnell said. "After the trial, I am now and will forever be a total proponent of gay marriage."
In 2003 O'Donnell and Carpenter partnered with travel entrepreneur Gregg Kaminsky to launch R Family Vacations catering to LGBT families, "the very first all gay and lesbian family vacation packages" where "gays and lesbians can bring their kids, their friends, and their parents." Although O'Donnell is not involved on a day-to-day basis, she does contribute to the creative aspects of "advertising and marketing materials" and initiated the idea for the company when she filled in as a last-minute replacement headliner on one of Kaminsky's Atlantis Events gay cruises and also came up with the name "R Family Vacations." On July 11, 2004, the first cruise was held with 1600 passengers including 600 children. In addition to traditional entertainment and recreational activities, the company partnered with Provincetown's Family Pride, a 25-year-old Washington, D.C.-based organization that advocates for GLBT families to host discussions on "adoption, insemination, surrogacy, and everything else that would be helpful to gay parenting." All Aboard! Rosie's Family Cruise, a documentary film about the trip debuted on HBO on April 6, 2006, and was nominated for three Emmy Awards. Of the experience O'Donnell stated "we didn't really realize the magic that was going to take place. People who had never met another gay family met other families and it was powerful."
Rosie has been with her partner Kelli Carpenter since 1998. They married in San Francisco on 2/26/04 as one of more than 3,000 couples who tied the knot after Mayor Gavin Newsom declared gay unions legal in that County. The San Francisco marriages have since been annulled.
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