A Christian baker has lost his appeal against an earlier court ruling that said he was wrong to refuse an order for a cake celebrating transgenderism. 

A three-judge panel of the Colorado Court of Appeals ruled against Christian baker Jack Phillips on Thursday. 

The case was brought against Phillips by transgender lawyer, Autumn Scardina, after he declined to bake a cake in the pink and blue colours of the transgender flag.

The decision published by Judge Timothy Schutz concluded that Phillips had violated Colorado's Anti-Discrimination Act because the order had initially been accepted but then retracted after discovering that the cake was to celebrate Scardina's transition. 

"Thus, it was Scardina's transgender status, and desire to use the cake in celebration of that status, that caused Masterpiece and Phillips to refuse to provide the cake," the judge said. 

The Alliance Defending Freedom, representing Phillips, said that he will appeal the verdict.

"Free speech is for everyone. No one should be forced to express a message that violates their core beliefs," said ADF Senior Counsel Jake Warner.

"Over a decade ago, Colorado officials began targeting Jack, misusing state law to force him to say things he does not believe. Then an activist attorney continued that crusade.

"This cruelty must stop. One need not agree with Jack's views to agree that all Americans should be free to say what they believe, even if the government disagrees with those beliefs."