The New York State Parole Board came to the decision after a hearing with Chapman, 59, on Wednesday.
They determined that they believed Chapman would again break the law if he were released, according to the New York Times.
"This victim had displayed kindness to you earlier in the day," the written statement added, "and your actions have devastated a family and those who loved the victim."
The board concluded that releasing Chapman would be "incompatible with the welfare of society."
Chapman shot and killed Lennon outside his apartment house in Central Park West on December 8, 1980. He hit him with four out of a total five shots.
In his 2012 hearing Chapman described how Lennon had agreed to autograph an album cover for him six hours before his murder.
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