The ruling overturned a 2016 verdict by a lower court that Breivik's near-isolation amounted to "inhuman and degrading treatment" under the European Convention on Human Rights.
The appeals court said that the strict conditions were justified because "there is a high risk that Breivik will resort to violence in the future".
It said the conditions were also necessary for his own safety, as other prisoners might attack him.
The 38-year-old neo-Nazi is currently serving a 21-year-prison sentence for massacring 77 people in July 2011.
In the attack Breivik disguised himself as a police officer and gunned down 69 people, mostly teenagers, at a Labour Party youth camp on the island of Utoya.