The decision by Germany's top court for public and administrative disputes signals that the state's constitutional obligation to educate children can take precedence over customs and practices linked to an individual's religious beliefs.
German Chancellor Angela Merkel and her center-right government have sought dialogue with the country's roughly four-millions Muslims, but have also said they must make an effort to integrate and learn German.
The court said Muslim schoolgirls could not be exempted from swimming lessons, provided they were allowed to wear so-called "burkinis," full-body swimsuits worn by many Muslim women which leave only the face, hands and feet exposed.
The plaintiff was a Muslim girl, originally from Morocco, who goes to school in the western state of Hesse. Her parents have tried for several years to stop her from joining swimming lessons with boys. She was 11 years old when the case started.
"The plaintiff has not made sufficiently clear that ... taking part in co-educational swimming lessons with a burkini breaches Muslim rules on clothing," said the Federal Administrative Court in Leipzig, rejecting her appeal.
Two courts in Hesse had already rejected her bid to be exempted from swimming lessons.
