Nelson Chamisa maintained that he had won the first election since the departure of Robert Mugabe last November and said the Constitutional Court had foiled his bid to subpoena the election commission to provide critical proof to bolster his case.
The court dismissed Chamisa's challenge on Friday saying he had failed to prove his allegations of vote fraud.
A widely condemned army crackdown in response to post-election violence by opposition supporters left six people dead on Aug. 1, recalling the heavy-handed security tactics that marked Mugabe's 37-year rule, Presstv reported.
"I respectfully disagree and reject the position that was arrived at by the constitutional court," Chamisa told reporters in Harare.
"President Mnangagwa is disputed as leader. I have a legitimate claim that I am supposed to be leading the people of Zimbabwe," Chamisa said, adding that he would not attend Mnangagwa's inauguration on Sunday.
Last month's election, in which Mnangagwa and Chamisa were the main contenders, was expected to pull Zimbabwe out of its diplomatic isolation, end international sanctions and launch an economic recovery.
But the vote has once again left the nation polarized after violence flared on the streets of Harare, and Chamisa, who leads the opposition Movement for Democratic Change (MDC), mounted his legal challenge.
Chamisa says he won the election with 2.6 million votes compared with two million for Mnangagwa but he has provided no evidence. The official result showed Mnangagwa winning with 2.4 million votes to Chamisa's 2.1 million.
Chamisa acknowledged that, with the Constitutional Court's decision, "the legal route has come to a dead end".
He said his party's executive would meet on Wednesday to plot its next move and repeated that peaceful street protests were an option to "protect the people's victory".
EU and Commonwealth observers said the election passed off largely peacefully but listed several problems, including voter intimidation, distrust of the electoral commission and its delay in releasing results. The observers also heavily criticized the army crackdown on protesters.
Responding to Mnangagwa's comments on Twitter that his door and arms were open to Chamisa, the 40-year-old politician said any talks with the ruling party could only be about resolving the president's legitimacy and "vicious cycle of disputed elections".
Chamisa's comments will do little to ease tension in a country that has been caught up in disputed polls since the MDC contested its first election in 2000.
In separate statements on Friday, the European Union urged all parties to "call for calm and restraint" after the court ruling, while the United States called for the parties to respect the "constitution and the rule of law."
After his inauguration on Sunday, Mnangagwa faces the challenge of persuading the international community that the army crackdown and lapses in the election process will not derail his promise of reforms to overcome corruption and mismanagement under Mugabe.