The state Senate voted 17-11 nearly along party lines to send the bill to Gov. Jan Brewer, who has not taken a position on the measure championed by fellow Republicans. The House approved the bill April 13.
"This bill goes a long way to bringing law and order to the state," said Sen. Al Melvin, R-Tucson, who cited costly services provided to illegal immigrants and the recent slaying of a southeastern Arizona near the U.S.-Mexico border as reasons for the move.
The new measure would be the latest crackdown in Arizona, which has an estimated 460,000 illegal immigrants and is the nation's busiest border crossing point.
Arizona enacted a law in 2005 making human smuggling a state crime and prohibited employers from knowingly hiring illegal immigrants with a law in 2007.
The latest bill would make it a. It also would require police to question people about their immigration status if there's reason to suspect they're in the country illegally.
Other provisions allow citizen lawsuits against government agencies that hinder enforcement of immigration laws, and make it illegal for people to hire illegal immigrants for day labor or knowingly transport them.
Republican Sen. Russell Pearce of Mesa, who sponsored the bill, said it will take handcuffs off police and put them on violent criminals. "Enough is enough," Pearce said.
U.S. Sen. John McCain on Monday called the bill a "tool that I think needs to be used." His office later said that wasn't an endorsement.
"It's also a commentary on the frustration that our state Legislature has that the federal government has not fulfilled its constitutional responsibilities to secure our borders," the Arizona Republican said.
Sen. Leah Landrum Taylor, D-Phoenix, predicted the legislation would cause chaos by spawning suspicion among neighbors, friends and relatives about who might be in the country illegally.
"Our state will be going completely backward," she said.
The Mexican American Legal Defense and Education Fund has all but promised a legal challenge if the legislation becomes law.
The organization claims the measure is unconstitutional because the federal government is responsible for immigration enforcement.
"The bill is so vague that it encourages investigation and arrest of people ... who essentially have done nothing wrong but because of their racial profile," said Gladys Limon, an attorney for the Los Angeles-based group.
Mexico's embassy also has voiced concerns about racial profiling.
Arizona law enforcement groups are split on the bill, with a union for Phoenix Police Department officers supporting it and a statewide association of police chiefs opposed.
Calls, e-mails and letters on the bill were running 3-1 in favor, Brewer spokesman Paul Senseman said.
Brewer's predecessor, Janet Napolitano, a Democrat who is now President Barack Obama's Homeland Security secretary, vetoed similar proposals.
Current law in Arizona and most states doesn't require police to ask about the immigration status of those they encounter, and some police officials say allowing such questions would deter immigrants from cooperating in other investigations.
The bill is regarded as carrying political high stakes for Brewer, who faces challenges from fellow conservatives in the Aug. 24 Republican primary.
If she vetoes it, "she would be crushed in the primary," said Mike Gardner, a business lobbyist and former legislator.
Vincent Picard, a federal Immigration and Customs enforcement spokesman in Phoenix, declined comment on the Arizona legislation and referred a reporter to the U.S. Department of Homeland Security's Washington headquarters. The agency did not immediately respond to a request for comment.
Arizona police use the human smuggling law from time to time to charge suspects.
In Maricopa County, however, more than 1,500 people were convicted under that law, with 85 percent immigrants, not smugglers.
To reduce the economic incentive for immigrants to sneak into the country, Arizona lawmakers also approved a civil law in 2007 that prohibits employers from knowingly hiring illegal immigrants.
Authorities across Arizona have examined several dozen complaints of employer sanction violations. But in the more than two years since that law took effect, only two cases have been settled with employers admitting to violating the law.