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The attorney general’s office said in a statement that a court in Mexico City ruled against Guzman, but his lawyer immediately told AFP he would appeal the ruling to a higher court.
The foreign ministry had approved the Sinaloa drug cartel chief’s extradition in May, but his lawyers fought the decision in the district court.
The tribunal in the capital “decided to reject the protection” sought by Guzman, the attorney general’s office said.
The national security chief, Renato Sales, said last week that the government hopes to extradite Guzman by January or February.
One of Guzman’s lawyers, Andres Granados, said he would pick up court documents on Tuesday and that from there he would have 10 business days to appeal to a “college” of judges.
He also vowed to seek a Supreme Court hearing.
“We are not defeated,” Granados told AFP, adding that he could still take the case to a regional human rights body.
Guzman was recaptured in January, six months after his brazen escape from a maximum-security prison through a 1.5-kilometer (one-mile) tunnel that opened into his cell’s shower.