The Constitutional Council made up of judges and former French presidents on Friday upheld 2011 legislation banning hydraulic fracturing for exploration and production of the country's shale gas and oil deposits.
US-based company Schuepbach Energy had challenged the law which was introduced under former French President Nicolas Sarkozy on concerns the fracking technology could potentially pollute groundwater and trigger earthquakes.
But the court threw out the challenge and said "the disputed components of the 2011 law comply with the Constitution."
The ruling was reported to be a boost to President Francois Hollande who, like the ecologist Greens in his governing coalition, had opposed fracking all along, but it angered conservative lawmakers who believed France was sacrificing access to a cheap source of energy.
The International Energy Agency (IEA) had named France as a European country with some of the most plentiful underground reserves of shale gas.
Friday's ruling did not bode well for French oil giant Total which was still awaiting a court decision after it separately appealed the government's ban an exploration permit by the authorities in the southeastern town of Montelimar.
hg/kms (Reuters, AFP, dpa)