Members of the chamber voted 237 to 156 to force ministers to reveal the full cost of the plan, one of its most contentious aspects, before introducing it.
The move obliges Home Secretary Charles Clarke to make a report to parliament giving a detailed account of costs versus expected benefits, which must then be approved by lawmakers.
Prime Minister Tony Blair's government could opt to reverse the decision through a vote in the more powerful lower chamber, the House of Commons, but such a move risks another potentially embarrassing defeat.
The plan to introduce identification cards carrying biometric details of the holder, initially on a voluntary basis starting around 2008, has been savaged by critics.
Although compulsory ID cards are routine in many other countries, Britain has had no such system since shortly after World War II, and opponents argue the cards are an unnecessary infringement of civil liberties,
Mr Blair's government insists they will help prevent terrorism, but critics argue they would have done nothing to stop the London bombings on July 7 last year, given that all four presumed suicide attackers were British nationals who would have had no trouble acquiring the cards.
Debate has also centred around the cost of the plan. The government estimates it at around 580 million pounds (A$1.3 billion) a year, but a report by London School of Economics experts said it could end up costing more than three times as much.
"This amendment is about transparency and openness in government, and I do not believe that the government have demonstrated those qualities in connection with this bill," said Sheila Masters, a Lords members for the main opposition Conservative Party.
"We must give the Commons the opportunity to approve the costs and the benefits and to decide themselves about affordability."