Robert Jordan, a 49-year-old college graduate, took an exam to join the New London police, in Connecticut, in 1996 and scored 33 points, the equivalent of an IQ of 125.
But New London police interviewed only candidates who scored 20 to 27, on the theory that those who scored too high could get bored with police work and leave soon after undergoing costly training.
Mr Jordan launched a federal lawsuit against the city, but lost.
The 2nd U.S. Circuit Court of Appeals in New York upheld a lower court's decision that the city did not discriminate against Mr Jordan because the same standards were applied to everyone who took the test.
He said: "This kind of puts an official face on discrimination in America against people of a certain class. I maintain you have no more control over your basic intelligence than your eye color or your gender or anything else."
He said he does not plan to take any further legal action and has worked as a prison guard since he took the test.
The average score nationally for police officers is 21 to 22, the equivalent of an IQ of 104, or just a little above average.
See also: NYPD cop assaults cyclist...
And this: Toronto cops disrupt street musicians...