Five non-permanent seats are up for grabs in the vote by the UN General Assembly, three of which were filled in a first round of secret ballot voting.
After the first round, Kazakhstan was ahead with 113 votes compared to 77 for Thailand, but the central Asian country fell short of the two-thirds majority required to win election to the seat reserved for Asia.
Among the world's top aid donors, Sweden picked up 134 votes, scoring an outright win, while the Netherlands garnered 125 votes and Italy 113, falling short of the required majority.
The five new elected countries will take their place alongside the five permanent council members -- Britain, France, China, Russia and the United States.
The other five non-permanent members are: Egypt, Japan, Senegal, Ukraine and Uruguay.
Ethiopia picked up 185 votes, running unopposed as the candidate from Africa.
With some 8,100 troops deployed in UN missions, Ethiopia is the largest contributor of UN peacekeepers and has been active in trying to mediate an end the war in South Sudan.
Bolivia, which had the backing of Latin American and Caribbean countries, won 183 votes.
On the eve of the vote, Human Rights Watch called on UN member-states to closely scrutinize the human rights record of Kazakhstan and Thailand.
Thailand's military junta, which seized power in May 2014, has banned political activity and ramped up prosecutions under tough sedition and royal defamation laws.