Reports published on Falun Gong websites last month said the group's followers were experimented on at the hospital and their organs transplanted.
But at a press conference in Beijing organised by the Chinese government on Wednesday, officials from the National Traditional Medicine Thrombus Treatment Centre in the north-eastern city of Shenyang dismissed the accusations as "totally fabricated."
"We haven't performed any organ transplants, because we don't have the qualifications or the means," said hospital vice president Zhang Yuqin.
He said the hospital was considering sueing an overseas Falun Gong Web site and newspaper after being flooded with phone calls from outside China following the report's appearance in March.
Falun Gong supporters said the hospital had held up to 6,000 practitioners in its basement, using them for live experiments, removing their organs for transplant and incinerating the bodies.
Officials said the hospital did not have a basement or incinerator, and that the witnesses cited by the group "did not exist."
Sharon Xu, a spokeswoman for the group, said the Falun Gong stood by the reports and that other Chinese hospitals carried out "systematic organ harvesting" from their followers.
The UN torture investigator Manfred Nowak said last month he was looking into the allegations.
The Falun Gong is a spiritual movement that mixes traditional Chinese beliefs and meditation exercises.
It was banned in 1999 after practitioners surrounded the Communist Party leadership compound.