The Oakland Raiders rookie quarterback had appealed the punishment, which was related to NCAA violations he committed while at Ohio State. Pryor entered the NFL supplemental draft instead of serving a five-game ban with the Buckeyes after being involved in a cash-for-memorabilia scandal that has put Ohio State under NCAA investigation.
"This smacks of a calculated effort to manipulate our eligibility rules in a way that undermines the integrity of, and public confidence in, those rules," Goodell said in his decision.
Pryor was selected by the Raiders in the third round of the supplemental draft Aug. 22. He originally said he would not contest the ban but changed his mind and filed the appeal through the NFL Players Association.
Several members of the union's executive committee had expressed concerns about Goodell suspending a player who was not yet in the league.
NFL Network's Jason La Canfora reported Friday that the union plans to file a non-injury grievance on Pryor's behalf.
Pryor did not attend his hearing Sept. 15 in New York.
"As we have done throughout this process, we will consult with Terrelle and support him in his decision" on what to do next, NFL Players Association spokesman George Atallah said.
Pryor chose to give up his final season with the Buckeyes soon after coach Jim Tressel was forced out of his job for failing to notify administrators about players -- including Pryor -- trading memorabilia for cash and tattoos at a Columbus, Ohio, tattoo parlor.
The quarterback originally was barred from entering the supplemental draft, then was approved by Goodell, with the proviso he must sit out five games.
Goodell said Pryor left Ohio State "in order to avoid the consequences of his conduct while in college -- conduct to which he had admitted and for which he had accepted a suspension -- and to hasten the day when he could pursue a potentially lucrative professional career in the NFL."
"In my judgment, allowing players to secure their own ineligibility for college play in order to avoid previously determined disciplinary consequences for admitted conduct reflects poorly not on college football -- which acted to discipline the transgressor -- but on the NFL, by making it into a sanctuary where a player cannot only avoid the consequences of his conduct, but be paid for doing so," Goodell said.
The Associated Press contributed to this report.