Federal Court Justice John Dowsett dismissed Ms Prior's case in November on the grounds it did not have reasonable prospects of success, and awarded $200,000 in costs against her.
Ms Prior sought to appeal the verdict, but that request, too, was denied in the Brisbane federal court on Friday.
The decision ends a four-year legal battle, the fallout from which prompted the federal government to set up an inquiry into changing section 18C of the Racial Discrimination Act.
The case stemmed from an incident in 2013, when Ms Prior informed three non-Indigenous students they were in a computer lab in a QUT Aboriginal and Torres Strait islander studies area.
Comments in response on Facebook led her to make a racial vilification complaint, seeking to sue the students for $250,000 under 18C of the Racial Discrimination Act, which makes it unlawful to "offend, insult, humiliate or intimidate" on the basis of race.
In the intervening years, Ms Prior said she's received a barrage of online threats and abuse.
"To have people say you're nothing but an ‘Abo’ and you don't deserve anything, it's demeaning," the widowed mother-of-three told SBS in December.
Ms Prior reported a 5000-page dossier detailing that abuse to the Australian Federal Police.
Nevertheless, she said she had "no regrets" about making the original complaint "because racism is unacceptable".
Broader debate around 18C has dominated sections of the media, and formed the basis of a 'Racism, the media and the right' discussion in Sydney on Friday.
The forum heard The Australian newspaper had published 96 articles on the Racial Discrimination Act in 2016, with one third of those focussed on Ms Prior's case.
In total, these articles generated more than 19,000 comments, including 26 opinion pieces.