In a veto issued Friday, the Democrat blocked Senate Bill 1010, which would have designated portions of Loop 202 as "Charlie Kirk Loop 202" while retaining existing regional names.
The move follows the governor's earlier veto of legislation that would have created a specialty license plate honoring Kirk, with proceeds benefiting TPUSA's nonprofit arm.
In her veto message, Hobbs called Kirk's killing "tragic" and condemned political violence, emphasizing that differences should be resolved "at the ballot box."
Republican lawmakers, including Senate President Warren Petersen, criticized the decision.
"Charlie Kirk called Arizona home and built a national movement centered on free speech, civic engagement, and American values," Petersen said in a statement.
"He inspired millions of Americans, especially young people, to get involved in their communities and participate in the political process."
Petersen argued the veto breaks with precedent, noting that Arizona has historically named roads after figures from both parties.
"Congressman Ed Pastor, a Democrat, has a major freeway named in his honor, and it was recognized as a tribute to his service and contributions to this state," he said.
"Today's decision marks a clear departure from Arizona's long-standing tradition of recognizing impact over politics."
He added: "Governor Hobbs didn't just veto a bill. She broke with a long-standing Arizona tradition of recognizing impact over politics. Charlie Kirk inspired millions of Americans to engage in their communities, speak freely, and exercise their First Amendment rights."
Kirk, a prominent conservative commentator, founded TPUSA in 2012 and later relocated its headquarters from Illinois to Arizona, making the state a base for the organization's national campus activism.
He was shot to death last September while speaking at a college event in Utah, in what officials described as a targeted attack.