Gross was found guilty in March of bringing satellite and other communication equipment into Cuba illegally. He has acknowledged he was working on a USAID-funded democracy program but said he meant no harm to the government and was trying to help the island's tiny Jewish community.
On Friday, the Supreme Court "issued a definitive resolution denying the appeal" filed by Gross, said a note published on the state-run website Cubadebate.
During the initial trial, the court found, "it was demonstrated that [Gross] illegally introduced telecommunications equipment in Cuba to create internal networks as part of a program of the government of the United States that aimed to promote destabilizing actions in the country and subvert Cuban constitutional order."
Prominent Jewish leaders in Havana have denied working with Gross.
Gross' U.S. lawyer, Peter J. Kahn, said in a statement: "While we are not surprised, we are extremely disappointed with today's ruling. . . . The family is heartbroken by today's decision, but remains hopeful that there continues to be room for a diplomatic resolution of this matter."
The Gross case has been a stumbling block to any warmer relations between the Cold War rivals. U.S. officials say that ties cannot improve while he remains in prison.
State Department spokesman Mark Toner deplored Friday's ruling. "Alan Gross is a dedicated international development worker who . . . was in Cuba to help the Cuban people connect with the rest of the world," he said.
"We will continue to use every available diplomatic channel to press for his immediate release," Toner said.
U.S. officials said earlier that they did not expect the court to throw out the conviction but hoped the end of the appeals process might clear the way for his release on humanitarian grounds.
Gross has lost 100 pounds in jail by his estimation, several family members in the United States have serious illnesses, and his family has had to sell its home.
Cuban officials have said privately that they are sympathetic to humanitarian appeals but would not consider them until the Supreme Court ruled.
Gross' arrest also prompted soul-searching in Washington over the democracy programs, which several Cuban American politicians passionately support.
Two powerful Senate Democrats, John Kerry and Patrick J. Leahy, held up $20 million in funding for months, arguing that the programs don't work and have harmed U.S. interests. Kerry (D., Mass.) and Leahy (D., Vt.) recently ended their holds after getting assurances from USAID and the State Department on oversight.
Sen. Robert Menendez (D., N.J.), the son of Cuban immigrants, said that "Gross' sentence eviscerates the notion held by some that the Castro brothers are embracing democratic reforms, but rather is a reminder that the regime seeks to control every aspect of life in Cuba and is willing to harshly punish anyone who challenges that control."