Pinochet, who ruled Chile for 17 years after leading a coup in 1973, must now face the first of a series of human rights charges against him related to Operation Colombo, in which 119 members of an armed leftwing group disappeared in the mid-1970s and are presumed dead.
The panel of five judges from the Supreme Court in Santiago ruled three to two to reject the defence argument that Pinochet's health problems, which include mild dementia caused by frequent mini-strokes, made him unfit for trial.
He will face charges in six cases of people who disappeared during his dictatorship. The Supreme Court is still considering a separate appeal motion from the defence for three other cases related to the Colombo disappearances.
Judge Alberto Chaignau said on Monday: "The first instance for appeal has been confirmed as rejected, by three votes to two. The second appeal was left for tomorrow."
In the past five years, Chile's courts have thrown out three human rights cases against Pinochet because of his poor health, but some doctors on a new medical panel ordered by the courthave said that he had exaggerated his symptoms.
Pinochet has been under house arrest since late last month on other human rights charges. He was also indicted for tax fraud and other crimes related to about $27 million hidden in foreign bank accounts.
The Pinochet regime is accused of covering up the Operation Colombo deaths by planting false news stories saying that members of the Revolutionary Leftist Movement killed each other in an internal dispute and armed confrontation.