She said adding fluoride breached section 11 of the Bill of Rights Act, which states everyone has the right to refuse to undergo medical treatment.
She also argued the council was not legally authorised to add fluoride to the water.
But the Supreme Courtdisagreed.
It dismissed the appeals and awarded costs of $20,000 to the council.
Today's ruling follows a six-year legal battle that began when the lobby group took the matter to the High Court, where the council's right to fluoridate the supply was also upheld.
READ MORE: Fluoride approval for South Taranaki
The Ministry of Health then declared fluoride was not a medicine, after the High Court recommended it consider passing a regulation under the Health Act to put the matter beyond doubt.
South Taranaki mayor Ross Dunlop said the legal battle had cost the council at least $300,000-$350,000, though the Ministry of Health had assisted with funding.
"We had a request from our local district health board to add fluoride into some extra communities in our district. We took that up, not expecting to end up in a very complicated legal situation," he said.
"We were just trying to do the right thing, particularly for young people in our communities with challenges in oral health. It turned into a major legal battle, which wasn't our intention."
Water New Zealand chief executive John Pfahlert earlier said the benefits of fluoride protection for dental health were "irrefutable".
He said fluoride posed no health risks at the recommended levels of 0.7 to 1.0 parts per million in drinking water.
Anti-fluoride campaigner Mary Byrne said outside court this morning she was disappointed with the ruling.
"We think it's really disappointing and we think it defies logic," she said.
"If you go to the pharmacy and you buy fluoride tablets it has directions and dosage and it has warnings ... fluoride is a medicine."
She said fluoride was shown to lower IQ.
The New Zealand Dental Association (NZDA) has welcomed the ruling, however.
"We have seen South Taranaki District Council take part in expensive and unnecessary legal proceedings, at a cost to ratepayers. A cost that has also fallen on the Crown via the Attorney General," said chief executive Dr David Crum.
"Community water fluoridation is effective, safe and affordable, we will soon see decision-making for this sit with DHBs. This means that no council will have to face what South Taranaki District Council did as a result of making public health decisions for their community.
"The Centers for Disease Control and Prevention lists water fluoridation as one of the ten great public health achievements of the 20th century."