Tony Nicklinson had a stroke in 2005 that left him unable to speak or move below his neck. He requires constant care and communicates mostly by blinking, although his mind has remained unaffected and his condition is not terminal.
In January, the 58-year-old asked the High Court to declare that any doctor who kills him with his consent will not be charged with murder.
The High Court ruled that challenges from Nicklinson and another man named only as Martin to allow others to help them die without being prosecuted were a matter for Parliament to decide.
Nicklinson said he was "devastated and heartbroken" and planned to appeal the decision.
"I am saddened that the law wants to condemn me to a life of increasing indignity and misery," he said in a statement.
Martin, 47, also has locked-in syndrome and asked for the court to allow professionals to help him die either by withholding food and water or by helping him go to a clinic in Switzerland to die. His wife said she respects his wishes, but does not want to help kill him.
Locked-in syndrome is a rare neurological disorder where patients are completely paralyzed, and only able to blink. Patients are conscious and don't have any intellectual problems, but they are unable to speak or move.
The judges wrote that they were both "tragic cases," but said to allow euthanasia as a possible defence to murder "would usurp the proper role of Parliament."
Nicklinson had argued that British law violated his right to "private and family life" as guaranteed by the European Convention on Human Rights, on the grounds that being able to choose how to die is a matter of personal autonomy. He has previously described his life as "a living nightmare."
Legal experts weren't surprised by the ruling.
"This is a really slippery case," said Richard Huxtable, deputy director of the Ethics in Medicine department at Bristol University. "Although the courts have been willing to look at guidance around assisted suicide, this is about as far as they have been willing to go.
"The feeling seems to be that only Parliament could give adequate thought to what sort of law should be in place and the safeguards required."
In Europe, only Belgium, Luxembourg and the Netherlands allow euthanasia. Switzerland allows assisted suicide and is the only country that helps foreigners die at a clinic near Zurich.
"It's very clear courts are unwilling to make the radical shift in our understanding of murder by allowing euthanasia," said Arthur Caplan, director of medical ethics at New York University's Langone Medical Center.
"But they did leave a small door open for prosecutorial discretion," he said, pointing out the judges acknowledged that the decision to prosecute people who helped others to die were not always straightforward.
Britain's top prosecutor has previously said that people who help loved ones commit suicide won't necessarily be charged with murder.
Caplan said the British cases were a major departure from past euthanasia debates because neither man is terminally ill.
"Most of the cases which triggered legislation in the past were about dying people and their quality of life," he said. "We will see more of these discussions as people live longer and we decide what to do about those who are severely impaired."
Nicklinson said he hoped the courts would grant him another hearing later this year. Experts said he could take his case to the Supreme Court or to the European Court of Human Rights in Strasbourg.