The appeal, which opened at a court in the Bavarian city of Regensburg without Bishop Richard Williamson present, marked the fifth round of court proceedings in the case.
"The appeal was rejected," said court spokesman Johann Piendl.
The 73-year-old bishop was convicted of incitement to hatred after telling Swedish television in a 2009 broadcast that "200,000 to 300,000 Jews perished in Nazi concentration camps" and disputing the existence of Nazi gas chambers.
His lawyer argued the conviction should be quashed as the bishop had expected the interview to be aired only in Sweden, where denying the Holocaust is not a crime.
But the actual interview took place in Regensburg and it is illegal in Germany to deny the Nazis murdered six million Jews during World War Two.
Two courts handed him fines, but these were later quashed due to procedural problems, before a further court fined him €1,800 in January.
While still a member of a breakaway ultra-conservative Catholic fraternity, the Society of Saint Pius X Society, Williamson also hit the headlines in 2009 when the then pope, Benedict XVI, reversed his excommunication in a bid to bridge a rift with the organisation.
Benedict later said he would not have made such a move if he had known about Williamson's views on the Holocaust.
Williamson was expelled from the fraternity of traditionalists last year after it said he had disobeyed and disrespected his superiors for several years.