Gary McKinnon, the 'NASA hacker', is to be extradited to the US to face trial.
McKinnon, from north London, was defending himself against the order in the UK Court of Appeal, after home secretary John Reid determined in 2006 that the extradition should go ahead.
McKinnon will now be tried in the US on charges of breaking into and damaging US government computers.
McKinnon is alleged to have hacked into computers belonging to the US Army, US Navy, US Air Force, Department of Defense and NASA.
He claims that he broke into the networks only to uncover confidential information about anti-gravity propulsion systems and extraterrestrial technology, which he believed the authorities were hiding from the public.
He has led a high profile campaign to avoid extradition, supported by many other computer hackers.
"The US government is taking a hard line towards cybercrime, and certainly won't tolerate anyone trying to compromise its own computers - McKinnon really should have considered this before he went UFO-hunting," said Graham Cluley, senior technology consultant at internet security firm Sophos.
A lawyer for the US government said the hacking "was intentional and calculated to influence and affect the US government by intimidation and coercion".
Last year, a Sophos online poll revealed that 52% of IT professionals thought McKinnon should not be extradited, while 48% said it was correct for him to face a US court.
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