Asia Bibi, a mother of five, was arrested in 2009 under blasphemy charges while working in a farm with Muslim women.
A two-member Lahore High Court (LHC) bench headed by Justice Anwarul Haq dismissed the appeal of Asia after her lawyers failed to prove her innocence in the court.
"We are utterly disappointed. But we will file a review petition against the LHC decision in the Supreme Court," Naeem Shakir, a counsel for Asia, said.
"We are hopeful to get relief from the apex court," he said.
Asia is a resident of Ittan Wali village district Sheikhupura, some 60 kilometres from Lahore. She was arrested after two Muslim women accused her of making drinking water unclean by touching the pot. Christians are prohibited from touching utensils used by Muslims in Pakistan.
The heated arguments between Asia and Muslim women ended on a charge that she had committed blasphemy.
Christian groups and global human rights campaigners condemned the verdict and called for the blasphemy laws to be repealed.
Mumtaz Qadri, the assassin of Taseer, had told police that he killed Taseer for calling blasphemy laws "black" and pursuing the case of Asia.
Human rights groups believe the law is often used to discriminate against religious minorities.
Blasphemy is punishable by death in Pakistan. Blasphemy laws were introduced by former dictator Ziaul Haq in 1980s. They are sometimes misused by the people against opponents including both Muslim and non-Muslims.
So far authorities have failed to stop the misuse due to pressure by extremists.
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