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The rules mean Caster Semenya and other athletes with DSD hoping to compete at the World Championships in Doha in September would have to start taking medication to lower their testosterone levels within one week.
Olympic 800-metres champion Caster Semenya on Wednesday lost her appeal against rules that mean female athletes with high natural levels of testosterone must take medication to reduce it.
The Court of Arbitration for Sport (CAS) ruled the regulations were necessary for athletes with differences in sexual development (DSDs) to ensure fair competition.
But it also voiced concern about how the new rules, which cover events ranging from 400-metres to a mile, would be implemented by the International Association of Athletics Federations (IAAF), the sport's governing body.
Testosterone increases muscle mass, strength and haemoglobin, which affects endurance. Some competitors have said Semenya's higher levels of the hormone give her an unfair advantage.
"I know that the IAAF's regulations have always targeted me specifically," Semenya said in a statement released via her lawyers. "For a decade the IAAF has tried to slow me down, but this has actually made me stronger. The decision of the CAS will not hold me back.
"I will once again rise above and continue to inspire young women and athletes in South Africa and around the world."
Semenya, from South Africa, and her lawyers are considering appealing the ruling.
Semenya has said she does not wish to take medication to change who she is and how she was born, and wants to compete naturally.
The case is likely to have far-reaching consequences, not just for the future of athletics, but all women's sport, and has split opinion around the globe.
The ruling means Semenya and other athletes with DSD hoping to compete at the World Championships in Doha in September would have to start taking medication to lower their testosterone levels within one week.
Professor Steve Cornelius, an advisor to the Athletics South Africa legal team, told television news channel eNCA the case could be elevated to the European Court of Justice.
"There is a very limited possibility of taking to the Swiss Federal Court ... but matters taken to that court often fail. The next option one might contemplate would be the European Court of Justice," he said.
The IAAF welcomed the verdict, saying it is "pleased that the regulations were found to be a necessary, reasonable and proportionate means of achieving the IAAF's legitimate aim of preserving the integrity of female athletics in the restricted events.
"No athlete will be forced to undergo any assessment and/or treatment under these regulations. It is each athlete's responsibility, in close consultation with her medical team, to decide whether or not to proceed with any assessment and/or treatment," it said.
However, in the 165-page ruling, the CAS Panel expressed concerns as to the future practical application of the regulations.
"The Panel found that the DSD regulations are discriminatory, but the majority of the Panel found that, on the basis of the evidence submitted by the parties, such discrimination is a necessary, reasonable and proportionate means of achieving the IAAF’s aim of preserving the integrity of female athletics in the restricted events," the statement said.
Under the rules, female athletes who have high natural levels of testosterone will have to reduce their levels through medication to under 5 nmol/L, which is double the normal female range of below 2 nmol/L.
The court suggested the regulations be limited to events between 400- and 800-metres due to a lack of evidence that testosterone has a significant effect beyond these distances.
This has been rejected by the IAAF for now, which says it could expand or reduce events under the regulations in the future if there is a compelling scientific case.
"We have enough evidence from the field across all the disciplines covered by our regulations so they will remain included in the regulations," a spokesperson told Reuters.
The IAAF has received support from some current and former athletes.
But the governing body has also come in for criticism from human rights organisations. The United Nations Human Rights Council adopting a resolution in support of Semenya in March.
The reaction in South Africa has been particularly stinging.
Letlhogonolo Mokgoroane from Sonke Gender Justice, a non-governmental organisation, said: "Essentially it's reverse doping and it's disgusting. The decision will have far-reaching implications, not just on Caster Semenya, but it will also apply to transgender and intersex people."
Following the CAS case, other sporting bodies may now choose to set their own parameters for participation by DSD and transgender athletes in their individual codes.
