Friday's decision was the latest blow to efforts to win release for Khairullah Khairkhwa, who had been a Taliban governor and interior minister.
Last December, a few months after a federal judge refused to release him, The Associated Press reported that Khairkhwa was one of five Afghan prisoners at Guantanamo who were being considered for release as part of a peace deal with the Taliban.
But talks with the Taliban broke off in March.
His lawyers argued that he was merely a civil servant and had no military role.
But the appeals court concluded that Khairkhwa "was at least more likely than not a part of the Taliban forces."