Marshall Islanders have been at the forefront of anti-nuclear activism after ecologically-devastating American bomb tests at their Bikini Atoll.
The UK, India and Pakistan were accused of failing their obligations under the 1968 nuclear non-proliferation treaty.
But the International Court of Justice said it could not rule on the case.
The Marshall Islands had sought to use the case to force nuclear powers to disarm. The tiny South Pacific nation originally filed cases against all nine treaty signatories: The UK, US, Russia, France, China, India, Pakistan, Israel and North Korea.
But only the UK, India and Pakistan recognise the jurisdiction of the Hague-based International Court of Justice and only those three cases proceeded to the preliminary court stage.
At hearings in March, Marshall Islands' representative Tony deBrum said he watched one of the US nuclear tests with his grandfather as a nine-year-old boy.
"The entire sky turned blood red," he told judges. He said islands were "vaporised" by the tests.
Judge Ronny Abraham acknowledged the "suffering" of the Islanders but ruled that they failed to prove a legal dispute existed between them and the three nuclear powers before the case was filed in 2014, which meant the court had no jurisdiction to hear the case.
In 1996, the International Court of Justice issued an advisory opinion that the use or threat to use nuclear weapons would "generally be contrary to" the laws of war and humanitarian law.
A UN court has thrown out cases brought by the Marshall Islands against the UK and others for allegedly failing to stop the spread of nuclear weapons.