Irving sued American scholar Deborah Lipstadt and her publisher, Penguin Books, in Britain's High Court. He said their 1994 book branded him a "Holocaust denier" and accused him of distorting the truth of what happened in Adolf Hitler's Nazi Germany.
The verdict was greeted in near-silence by a courtroom packed with Holocaust survivors and others.
"The decision proves that David Irving is a falsifier of history,'' said Eldred Tabachnik, president of the Board of Deputies of British Jews. "Although the Holocaust itself was not an issue at the trial, we welcome the fact that attempts to manipulate the truth about the tragic events of that time have been shown to be baseless."
Irving, whose books include "Hitler's War," said he does not deny Jews were killed by the Nazis, but challenges the number and manner of Jewish concentration camp deaths.
He claimed that after the publication of Lipstadt's book, "Denying the Holocaust: The Growing Assault on Truth and Memory," his academic work was increasingly shunned by publishers and agents.
Under British law, Lipstadt and Penguin were not able to rely solely on truth as a defense. But Judge Charles Gray said Irving failed to prove his reputation had been damaged and called him "anti-Semitic and racist."
"Irving has for his own ideological reasons persistently and deliberately misrepresented and manipulated historical evidence," the judge said.
"He has portrayed Hitler in an unwarrantedly favorable light, principally in relation to his attitude towards and responsibility for the treatment of the Jews," he said.
Jewish groups expressed relief at the verdict against Irving, 62.
The Simon Wiesenthal Center, a Los Angeles-based movement dedicated to victims of the Nazis, hailed the verdict as a "victory of history over hate."
"David Irving's career as a historian is over," the center said in a statement. "Today's decision definitely places Irving where he belongs--not as a historian, but as a leading apologist for those who seek to whitewash the most heinous crime in human history."
He said he will not appeal. He faces legal costs of $3.2 million for Lipstadt and Penguin's lawyers, Britain's Press Association news agency said.
Irving, who represented himself during the nine-week, nonjury trial, is not new to controversy. His comments--some made while addressing neo-Nazi groups--have drawn fire from Jewish organizations around the world, and he has been banned from Germany, Canada and Australia.
Irving told the court he had been the victim of a 30-year international campaign to destroy his reputation "as a human being, as an historian of integrity."
Richard Rampton, the lawyer representing Penguin and Lipstadt, who holds the Dorot Chair in Modern Jewish and Holocaust Studies at Emory University in Atlanta, said during the trial that Irving perpetuated falsifications "for the sake of a bogus rehabilitation of Hitler and dissemination of virulent anti-Semitic propaganda."
Irving conceded he had made some "mistakes of copying, mistakes of omission," but said he corrected those errors. He claimed that rather than deny the Holocaust, he drew attention to major aspects of the tragedy.
Irving questioned the use of large-scale gas chambers to exterminate the Jews, and claimed that the numbers of those who perished are far lower than those generally accepted. He said most Jews who died at Auschwitz did so from diseases such as typhus, not gas poisoning.
In a sign of the international outrage directed at Irving, Israel even agreed to release the previously secret memoirs of Nazi war criminal Adolf Eichmann for use by Lipstadt and Penguin's legal team, saying it was morally obliged to help them.
In the 1,300 handwritten pages penned in an Israeli prison, Eichmann plays down his own role in the mass killing but also provides methodical descriptions of the genocide, including timetables of death transports.