The Russian Paralympic Committee had challenged the ban issued by the International Paralympic Committee (IPC) for failing to ensure compliance with its anti-doping code.
But CAS has upheld the suspension, prompting a furious response from Russian sports minister Vitaly Mutko who described the decision to block 267 Russian competitors as politically motivated.
"The decision is not in the legal domain," Mutko told Russian news agency TASS.
"It is more political than legal. There was no reason for rejection but it happened. The bodies that are meant to protect Paralympians don't protect them but punish them instead and this is of course sad."
The IPC said the decision underlined their belief that doping has no place in sport, but added it had sympathy for those who will miss out.
"Although pleased with the decision, it is not a day for celebration and we have enormous sympathy for the Russian athletes who will not miss out," said IPC president Sir Philip Craven. "We hope this decision acts as a catalyst for change in Russia."