Orbis Business Intelligence – run by ex-MI6 officer Christopher Steele – said it was “delighted” by the ruling.
Mr Trump had been seeking to use data protection laws to sue the company.
Mr Steele’s dossier contained unsubstantiated claims of bribery and sex parties.
Funded by Hillary Clinton’s Democrats and other political opponents of Mr Trump, the dossier was leaked to the media just before Mr Trump, a Republican, was sworn in as president.
In bringing the lawsuit against Orbis Business Intelligence Ltd, Mr Trump’s legal team said the dossier contained claims that were inaccurate and breached his data protection rights.
In Thursday’s ruling in London, Mrs Justice Steyn DBE said she did not make any judgement on the allegations themselves.
But she found Mr Trump’s claim had not been brought within the six-year limitation period.
“There are no compelling reasons to allow the claim to proceed to trial,” she wrote.
Orbis said the lawsuit should never have been brought.
“Mr Trump has already been criticised by US courts for pursuing vexatious litigation against us,” said its statement.
“And we feel strongly that Mr Trump also brought this claim in an attempt to exact revenge on Orbis and to chill free speech and legitimate investigations.
“Orbis stands by its sources and work and will not be deflected by such ‘lawfare’ practices.”
Another lawsuit that Mr Trump filed against Orbis, Mrs Clinton and FBI officials was dismissed by a federal judge in Florida in 2022.
Mr Steele has previously said the dossier was a series of memos based on intelligence and never meant for publication.
The case stems from 2016, when a US political consultancy asked Mr Steele’s company to produce a report into potential Russian interference in that year’s US general election.
Mr Steele, the former head of MI6’s Russia desk, sent his findings to the FBI, a British national security officer and an aide to a senior US senator.
The dossier, later obtained and published by BuzzFeed News, detailed uncorroborated intelligence claims that Mr Trump had a “compromising relationship with the Kremlin”.
The former president said in his witness statement when he brought the case last year that “none of these things [in the Steele dossier] ever happened”.
“I can confirm that I did not, at any time engage in perverted sexual behaviour including the hiring of prostitutes to engage in ‘golden showers’ in the presidential suite of a hotel in Moscow.”
Mr Trump said the dossier continued “to cause me significant damage and distress” because people still believed it.
He added that he had not had time to sue in the UK before 2023 because he had been busy being president.
Antony White KC, for Orbis, told the court in October that Mr Trump had accepted that the company was not responsible for BuzzFeed’s publication of the document.
Orbis also argued that the former president’s case was an attempt to address “longstanding grievances”.
A spokesman for Mr Trump, Steven Cheung, said that Mr Trump “will continue to fight for the truth and against falsehoods such as the ones promulgated by Steele and his cohorts”.
“The High Court in London has found that there was not even an attempt by Christopher Steele, or his group, to justify or try to prove, which they absolutely cannot, their false and defamatory allegations in the fake ‘dossier’,” Mr Cheung said in a statement.
A US Department of Justice report found in 2019 that the FBI had “raised doubts about the reliability of some of Steele’s reports”.
Federal investigators “also assessed the possibility that Russia was funneling disinformation to Steele”, said the inspector general.
An inquiry by Special Counsel Robert Mueller did not establish a criminal conspiracy between Mr Trump’s campaign and Russian agents to sway the 2016 election in his favour.
But it laid out 10 instances where Mr Trump had possibly obstructed justice during the investigation.