Mladic, 78, led Bosnian Serb forces during Bosnia's 1992-95 war. He was convicted in 2017 on charges of genocide, crimes against humanity and war crimes including terrorising the civilian population of the Bosnian capital Sarajevo during a 43-month siege, and the killing of more than 8,000 Muslim men and boys in the eastern Bosnian town of Srebrenica in 1995.
Mladic, who had contested both the guilty verdict and life sentence at his trial, wore a dress shirt and black suit and stood looking at the floor as the appeals judgment was read out in court in The Hague.
The appeals chamber "dismisses Mladic appeal in its entirety..., dismisses the prosecution's appeal in its entirety..., affirms the sentence of life imprisonment imposed on Mladic by the trial chamber," said a written summary of the judgment.
The outcome caps 25 years of trials at the ad hoc International Criminal Tribunal for the Former Yugoslavia, which convicted 90 people. The ICTY is one of the predecessors of the International Criminal Court, the world's first permanent war crimes court, also seated in The Hague.
"Today is a historic day not only for us mothers of Srebrenica but for all of the Balkans, Europe and the world," Munira Subasic, whose son and husband were killed by nationalist Serb forces that overran Srebrenica, said ahead of the hearing.
"Everywhere his army went, everywhere his boots went, he committed genocide in the villages, in the cities, in the houses. ..He killed everyone just because they were not Serbs."
“Political (decision)," Milorad Guzijan, a pensioner in largest Bosnian Serb city Banja Luka, said in reaction to the appeals verdict. "There is no justice there, just politics.” Many Serbs still see Mladic as a hero, not a criminal.
In Washington, the White House praised the work of the U.N. tribunals in bringing perpetrators of war crimes to justice.
"This historic judgment shows that those who commit horrific crimes will be held accountable. It also reinforces our shared resolve to prevent future atrocities from occurring anywhere in the world," it said in a statement.
The appeals judges said Mladic, who after his ICTY indictment was a fugitive for 16 years until his 2011 capture, would remain in custody in The Hague while arrangements were made for his transfer to a state where he will serve his sentence. It is not yet known which country will take him.
Fourteen European countries have taken in U.N. court convicts to serve out their sentences so far. Former Bosnian Serb political leader Radovan Karadzic was transferred to a British prison in May this year.
Lawyers for Mladic had argued that the former general could not be held responsible for possible crimes committed by his subordinates. They sought an acquittal or a retrial.
Prosecutors had asked the appeals panel to uphold Mladic's conviction and life sentence in full.
They also wanted him to be found guilty of an additional charge of genocide over a campaign of ethnic cleansing - a drive to expel Bosnian Muslims, Croats and other non-Serbs in order to carve out a Greater Serbia, in the early years of the war that included brutal detention camps that shocked the world.
That prosecution appeal was also dismissed. The 2017 verdict found that the ethnic cleansing campaign amounted to persecution - a crime against humanity - but not genocide.
U.N. human rights chief Michelle Bachelet said on Tuesday the final Mladic ruling meant the international justice system had held him to account.
"Mladić’s crimes were the abhorrent culmination of hatred stoked for political gain," Bachelet said in a statement. "Today’s decision is about his individual responsibility for his dreadful acts, not about collective punishment or apportioning guilt to any particular community."
Mladic was found at his trial to have been part of "a criminal conspiracy" in seeking to purge Bosnia of non-Serbs with the critical support of then-Serbian President Slobodan Milosevic, who died in 2006 shortly before the verdict in his own ICTY trial for genocide and crimes against humanity.
Mladic was found by the lower ICTY court to have played a leading role in some of the most gruesome crimes committed on European soil since the Nazi Holocaust of World War Two.
The tribunal determined that Mladic was pivotal in the Srebrenica slaughter - which occurred in a U.N.-designated "safe area" for civilians -since he controlled both the military and police units involved.
"The accused’s acts were so instrumental to the commission of the crimes that without them, the crimes would not have been committed as they were," the verdictsummary read.