Catholic newspaper The Herald wanted to continue using the word, which is commonly used in the Malay language to refer to God, but the government successfully argued it should be reserved for Muslims.
"The usage of the word Allah is not an integral part of the faith in Christianity," said chief judge Mohamed Apandi Ali.
"The usage of the word will cause confusion in the community."
The judgement overturns a decision by a lower court nearly four years ago.
Anger over that decision sparked arson attacks and vandalism at Malaysian churches and other places of worship.
The government has justified the ban on grounds of national security and to avoid misunderstanding and confusion.
Read more: http://news.sky.com/story/1154300/malaysia-allah-word-banned-for-non-muslims
