Judges at The Hague war crimes tribunal said that his legal rights are being met while he is represented by London-based barrister Richard Harvey, who was appointed in November.
Mr Karadzic had boycotted the first three days of his trial, saying he needed more time to prepare his defence.
He denies all 11 counts of war crimes relating to the 1992-95 Bosnian war, including the genocide of 8,000 Muslim men and boys at Srebrenica.
The charges against Mr Karadzic also include his role in the 43-month siege of Sarajevo beginning in 1992.
The court rejected Mr Karadzic's objection to the appointment, and he subsequently petitioned the tribunal's appeals chamber to reverse the decision, saying that Bosnian and Serbian lawyers were excluded from representing him.
The appeals chamber found that Mr Karadzic's 'persistent obstructive behaviour has made it necessary, in the interests of justice, to limit his right to self-representation by assigning counsel to represent his interests'.
Appeals Judge Theodor Meron argued in a 15-page decision that the court was acting to preserve Mr Karadzic's right to represent himself and also ensure the trial's smooth proceeding.
The trial has been adjourned until March to give Mr Harvey time to prepare.
When the court appointed Mr Harvey as legal counsel, it made clear that Mr Karadzic would be allowed to continue representing himself, but compelled him to work with Mr Harvey as legal counsel.
If Mr Karadzic continues to boycott the trial, he loses his right to represent himself and the appointed lawyer will take over.
