"It is significant that plaintiffs nowhere allege that the government intended to harm human beings through its use of Agent Orange," the three-judge panel said.
Jonathan C. Moore, a lawyer for the Vietnamese plaintiffs, said he was deeply disappointed.
"It's both an unjust and an immoral outcome," he said, and promised to appeal to the U.S. Supreme Court.
A lawyer for the companies did not immediately return a telephone call seeking comment.
Monsanto, Dow Chemical and more than a dozen other companies, including Hercules Inc., Occidental Chemical Corp, Thompson Hayward Chemical Co., Harcros Chemicals Inc. and Uniroyal Chemical Co. Inc., were named in the case.
In November 1961, President Kennedy approved the launch of Operation Trail Dust, a campaign of military herbicide operations in Vietnam designed to prevent the enemy from using vegetation for cover and sustenance.
Lawyers for Vietnamese people sued U.S. companies, saying the program caused miscarriages, birth defects, breast cancer, ovarian tumors, lung cancer, Hodgkin's disease and prostate tumors.
They said the military's use of Agent Orange violated international, domestic and Vietnamese law and that companies aided the violations or committed their own by helping the military. They sought unspecified compensatory and punitive damages and an environmental cleanup program.
Lawyers for the companies and the U.S. government had argued that there was no evil intent when Agent Orange was used to clear the Vietnamese landscape for troops.
Agent Orange has been linked to cancer, diabetes and birth defects among Vietnamese soldiers and civilians and American veterans.
In 2002, the United States and Vietnam signed a memorandum of understanding providing for scientists from both governments to work together to determine the effects of Agent Orange on people and ecosystems, along with methods and costs of treatment and environmental remediation.
The United States, though, has never agreed it has a legal duty to provide funds or assistance to remediate harms allegedly caused by Agent Orange.
In a separate opinion, the appellate court also said companies are protected from lawsuits brought by U.S. military veterans or their relatives because the law protects government contractors in certain circumstances who provide defective products.