The ruling came a day after Tymoshenko’s lawyers denounced what they called the inhumane conditions of her detention at a hearing before the European Court of Human Rights in Strasbourg, saying her 2011 arrest was intended to bar her from elections.
Tymoshenko's defence lawyer said the ruling by a three-judge panel in Kyiv had been steered by President Viktor Yanukovich for political reasons.
"These findings have no relation to justice," Serhiy Vlasenko told journalists after judge Olexander Yelfimov ruled that lower courts had delivered "correct decisions on the crimes of Tymoshenko."
"This is a decision of Yanukovich to keep Tymoshenko in prison," Vlasenko said.
Western leaders condemned the seven-year prison term meted out to the 51-year-old opposition leader in October as political persecution, and blocked strategic agreements on political association and a free-trade zone with the European Union.
But despite months of chiding by the EU and the United States, which see Tymoshenko as a victim of selective justice, Yanukovich has refused to act to secure her release. No one had expected her to be released on Wednesday.
Tymoshenko, recognisable for her peasant-style hair braid and known for fiery rhetoric, was not in court because of persistent back trouble which has kept her confined to a state-run hospital in eastern Ukraine.
About 300 of her supporters gathered outside the courtroom, chanting slogans such as "Yulia - Freedom!" and "Keep convicts inside and get Yulia out!" They lowered a mock coffin into the ground outside the courtroom to symbolise the death of justice.
In tough remarks last Friday, Yanukovich said he would not negotiate integration with the EU at the price of allowing it to interfere in her case.
The continued incarceration of Tymoshenko - by far the most vibrant opposition figure on Ukraine's political landscape - is certain to figure as a major issue in the 28 October legislative election.
Yanukovich's Party of the Regions goes into that election with the government highly unpopular over reforms that have increased taxes on small businesses and raised retirement ages, and it will have to work hard to retain its majority.
The abuse of office conviction relates to a gas deal that Tymoshenko brokered with Russia in 2009 when she was prime minister. The Yanukovich government says the agreement was reckless and saddled Ukraine with an enormous price for strategic supplies of gas which is taking a toll on the stressed economy.
Plea for help in Strasbourg
In Strasbourg, the court in Strasbourg is considering only the legality of her pre-trial detention and the conditions under which she was held. A ruling could take months.
Tymoshenko, who rose to international fame as the figurehead of the 2004-2005 Orange Revolution, had been kept in permanently lit, unheated cells and tracked by surveillance cameras, her lawyers said.
"She asked me to ask you for help," lawyer Serhiy Vlasenko told the Strasbourg court.
"The only reason for her detention was to exclude her from Ukrainian political life and to prevent her from participating in the 28 October parliamentary elections," Vlasenko said.
Tymoshenko’s party, Batkivschyna (Fatherland), has appealed to the country’s Supreme Administrative Court over the administrative refusal to register the former prime minister and Lutsenko, the former interior minister, as the party's parliamentary candidates for the legislative election in October (see background).
The European court's rulings cannot be appealed and signatories must comply or face exclusion from the Council of Europe. A committee is charged with ensuring members' laws are amended to reflect rulings but delays are common.
Last month, the same court condemned Ukraine for its 2010 pre-trial detention of Yuri Lutsenko, a former interior minister under Tymoshenko, and ordered Ukraine to pay 15,000 euros to the opposition politician. The court did not rule on the legitimacy of his conviction but called his detention arbitrary.
Then, on 17 August, a Ukrainian court sentenced Lutsenko to another two years. His new sentence should not add to his prison time, but the ruling means he could remain behind bars even if the European Court of Human Rights has ruled against his previous conviction.