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However, the court agreed with a previous High Court decision that the removal of clones of electronic items to the United States was not authorised.
Dotcom's legal team have indicated they will challenge the Court of Appeal's ruling that search warrants on his Coatesville mansion were valid.
The internet tycoon's US lawyer Ira Rothken said on Twitter today: "Our Kim Dotcom legal team is reviewing the ruling made by the Court of Appeal and will likely seek leave to appeal to the Supreme Court."
In its decision, released today, the Court of Appeal upheld in part the Attorney General's appeal against the High Court's decision which found the search invalid.
"In deciding that the search warrants were valid, the Court of Appeal accepts that they were in form defective in some respects, but the defects were not sufficient to mean that the warrants should be treated as nullities,'' the court said.
"Mr Dotcom and the other respondents would have understood the nature and scope of the warrants, especially in light of their arrest warrants, which were not defective, and the explanations given to them by the police when the properties were searched. In these circumstances no miscarriage of justice occurred.''
In relation to the clones of electronic items removed from Dotcom's property, the Court of Appeal found this was not authorised.
"The court is satisfied that the Solicitor-General's direction given under the Mutual Assistance in Criminal Matters Act 1992 applied to the clones and that their removal was therefore in breach of the terms of the direction.''
The High Court ruling, by Chief High Court Judge Helen Winkelmann, opened the way for Dotcom to challenge FBI evidence at his extradition hearing, effectively creating a mini-trial and making his removal to the United States less certain.
It was thought to be the the final decision in a legal argument over whether the FBI would have to prove at the extradition hearing that it has the evidence to back up its charges.
This now appears less certain.
Police executed search warrants on the properties of Dotcom and his associate Bram van der Kolk in January 2012 and seized some 135 electronic items.
The warrants were executed at the request of the US government, which is seeking their extradition to face trial on a number of alleged criminal offences, including breach of copyright and money laundering.
The following month, the Solicitor-General gave a direction that the seized items were to remain in the custody and control of the Commissioner of Police until further direction.
However, police permitted the FBI to remove clones - copies - of the items to the US.
Justice Winkelmann ruled that the warrants were invalid because they were not in sufficiently specific terms and that the removal of the clones to the US breached the Solicitor-General's decision.