In September last year, a Yangon district court sentenced Wa Lone and Kyaw Soe Oo to seven years in prison for illegal possession of official documents, sparking an worldwide outcry from activists and diplomats in a case seen by many as a test of Myanmar's fledgeling democracy.
Activists gather at a rally, calling for the release of imprisoned Reuters journalists Wa Lone and Kyaw Soe Oo, one year after they were arrested, in Yangon, Myanmar, Dec.12, 2018.
The trial of the pair was widely criticised, with human rights groups and worldwide governments accusing the Myanmar regime of using the courts to target the two reporters for their reporting on the military-led massacre of Rohingya muslims in the village of Inn Din in Rahkine.
"We will continue to advocate at all levels for the just release of these fearless journalists", State Department spokesman Robert Palladino said in a statement that used the USA government's preferred name for Myanmar.
Judge Aung Naing, however, rejected the appeal on Friday, saying the jail term handed to the journalists is "a suitable punishment".
Kyaw Soe Oo's wife, Chit Su, said the ruling came as a surprise.
Lawyers for the men had previously said that if their appeal failed, they would have to hope for a pardon or general amnesty to obtain an early release.
The reporters' work and stand for freedom of the press have earned them awards and plaudits.
In their appeal arguments made last month, defense lawyers had cited evidence of a police set-up and lack of proof of a crime.
The defense also said prosecutors had failed to prove the reporters gathered and collected secret information, sent information to an enemy of Myanmar or meant to harm national security.
Khine Khine Soe, a legal officer representing the government, told the appeal hearing the evidence showed the reporters had collected and kept confidential documents.
Britain called on Myanmar leader Aung San Suu Kyi to look at whether due process was followed.
Ms Suu Kyi's global standing has already been severely damaged by accusations from United Nations investigators that she failed to use her "moral authority" to stop the military's extreme violence against the Rohingya.
Standing outside the court building in Yangon where the judgment was pronounced, Kristian Schmidt, the European Union ambassador to Myanmar, said the ruling was a "miscarriage of justice and it gives us great concern for the independence of the justice system of Myanmar".
"We thought that they would be free today", she said. "We are very disappointed with the judgment", he said.
When arrested the two were investigating a mass execution of Rohingyas, hundreds of thousands of whom have been forced to flee destruction and persecution in the northern Rakhine province of Myanmar.