MEMPHIS, NOV. 1 -- The modest little church that was kicked out of the local Southern Baptist association last month for hiring a woman minister officially welcomed her today with embraces, songs, many speeches and some ceremony, but no regrets.

Nancy Hastings Sehested, 36, took over as pastor of Prescott Memorial Baptist Church here in an atmosphere of joy that masked the bitter controversy last month and troubles that may lie ahead. "This a miracle day . . . . This is our wedding day," the beaming pastor told her equally joyous congregation at the morning worship service.

Later, at the official installation, a parade of pastors, lay people, national church executives and visitors from other churches paid tribute to both the congregation and its new pastor and welcomed her to the community.

Tom Walsh, an attorney who is vice chairman of the deacons, said in his invocation at the installation that the congregation had sought to remain faithful to its principles. "For that single act of obedience, {God} has bestowed upon us this great gift, our sister Nancy."

Sehested's bouyant mood was not shared by many of the 14.6 million-member Southern Baptist Convention, where the role of fundamentalists who would deny all women the opportunity to serve as pastors is becoming increasingly dominant.

Just this week, she said in a brief interview, she was disinvited from a conference on Women in Ministry at Golden Gate Seminary in San Francisco because she has become too controversial.

"It's a discouraging time to be a Southern Baptist," she said. "It's a time of grief, but not a time of defeat, because God is bigger than the Southern Baptist Convention."

During the installation service there was an outpouring of support for the church and its new minister from the community. More than 20 people -- men, women, black, white, young, old, Baptist and members of other faiths -- welcomed her.

"You've stirred up a helluva lot of love," the Methodist pastor from a neighboring United Methodist church said.

"We welcome you to our community. Thank you for raising the right kinds of questions in our community," said a faculty member of the Memphis Theological Seminary, associated with the Cumberland Presbyterian Church. Sehested, daughter and granddaughter of Baptist preachers, was hired by the church in late August after a yearlong search.

Although Baptist procedures give each congregation total authority over ordaining, hiring and dismissing its ministers, fundamentalists who dominate the Shelby {County} Baptist Association demanded an investigation of Prescott's "doctrinal soundness," contending that a literal reading of the Bible forbids women ministers.

At a closed-door meeting Oct. 19, the association rejected the recommendation of its own credentials committee against censuring Prescott and voted instead to expel the church from the association.

But the widely reported move brought expressions of support for Prescott both locally and around the country. The ecumenical Memphis Ministers' Association, the Ecumenical Women in Ministry and the University Cluster Pastors adopted formal resolutions of support.

According to Betty Dawson, who heads the church's board of deacons, letters and telegrams and even gifts of money have poured in from all over the country.

A local businesswoman who has grown disillusioned with Baptist fundamentalism has agreed to pay for weekly newspaper ads for tiny Prescott that will be larger and more prominently displayed than those for Bellevue Baptist, the large church whose pastor, Adrian Rogers, moved the Southern Baptist Convention toward fundamentalism during his three terms as its president.

In the morning service, the only mention of the controversy the church experienced came from visitors. George Ramer of Florien, La., said he had become so discouraged with Southern Baptists' squabbling that he was considering leaving, but said Prescott's actions encouraged him to stay.