The European Union's enlargement commissioner, Olli Rehn, said the court's verdict against Hrant Dink, a Turkish-Armenian journalist, showed that Turkey still fell short of the standards required for EU membership.
"I am disappointed by this judgment which limits the exercise of freedom of expression in Turkey," said Rehn in a statement on Wednesday.
Dink, editor-in-chief of the bilingual Turkish and Armenian weekly Agos, was first given a six-month suspended prison sentence last year.
Turkey's highest court rejected his appeal and upheld the sentence on Tuesday.
He was found guity under Article 301 of the Turkish penal code which makes it a crime for writers and scholars to "insult Turkish identity".
More than 60 writers have been investigated for violating Article 301 since it was introduced last year.
Deadline for reform
Turkey will need to reform its penal laws to protect freedom of expression before late October or early November when the commission will issue a report on the country's attempt to join the EU.
"I would therefore urge the Turkish authorities to amend Article 301 and other vaguely formulated articles in order to guarantee freedom of expression in Turkey," Rehn said.
The European Commission can advise the EU to suspend negotiations with Turkey if it finds evidence of persistent breaches of human rights.
Dink said he would make a final appeal to the European Court of Human Rights since all his legal options in Turkey have been exhausted.
"I am of course deeply upset," Dink said in a statement. "But the verdict itself did not surprise me.
"The verdict of the supreme court concerning myself reveals that Article 301 and the other similar ones can never suit a democratic Turkey and should be immediately abolished."
Turkey's government says that no writers have been imprisoned under Article 301.
But the Turkish judiciary has used the law to prosecute Dink and other intellectuals for questioning official Turkish accounts of the First World War.
The writers argue that the ruling Ottoman Turks deliberately killed 1.5 million Armenians in 1915 as part of a policy that amounted to the 20th century's first act of genocide.
Turkey says that Christian Armenians and Muslim Turks suffered mass killings in sectarian violence that was not co-ordinated.