And it was a rare setback for the material girl who has projected an image of being able to attain whatever she sets her sights on, be it personal or professional.
Madonna was not present in the courtroom for the ruling, and there was no immediate comment from her spokeswoman in New York. The pop star's lawyer filed notice he would appeal, but no hearing date was set.
In a lengthy ruling, Judge Esme Chombo sided with critics who have said exceptions should not be made for pop superstar, who has set up a major development project for this impoverished, AIDS-stricken southern African country.
Noting that Madonna had last visited Malawi in 2008, the judge said the pop star "jetted into the country during the weekend just days prior to the hearing of this application."
"In my opinion, this would completely remove (Madonna) from the definition of `resident,'" the judge said.
Malawi requires prospective parents to live in the country for 18 to 24 months while child welfare authorities assess their suitability
- a rule that was bent when Madonna was allowed to take her now 3-year-old son David to London in 2006 before his adoption was finalized two years later. Madonna has two other children, Lourdes, 12, and Rocco, 8.
Chombo said other foreigners have adopted in Malawi, but Madonna's was the only case in which residency was waived, and she indicated concern that doing so again could set a precedent that might jeopardize children.
"It is necessary that we look beyond the petitioner ... and consider the consequences of opening the doors too wide," the judge said. "By removing the very safeguard that is supposed to protect our children, the courts ... could actually facilitate trafficking of children by some unscrupulous individuals."
The judge also made clear she was not questioning Madonna's intentions, and even praised the "noble" work the singer's charity has done to feed, educate and provide medical care for some of Malawi's more than 1 million orphans, half of whom have lost parents to AIDS.
It is "my prayer" that Mercy would benefit from such programs, Chombo said.
She noted the girl was receiving "suitable" care in an orphanage and contrasted that with David's situation in 2006, when the boy was about to be returned to his father, who had been struggling to care for him.
After Friday's ruling, journalists saw Madonna, chic in black and looking relaxed and at times even cheerful, as she toured an area where she is building a school near Malawi's capital, Lilongwe. Wherever she went, she was surrounded by media and curious villagers.
Madonna first traveled to Malawi in 2006 while filming a documentary on its devastating poverty and AIDS crisis, and later decided to adopt there.
In an interview with The Associated Press last year, Madonna spoke of being drawn to the people of Malawi, particularly the children.
"I saw that people with so little had so much appreciation for life and so much joy. It gave me a real sense of appreciation for what I have and ... it put things in perspective for me," she said.
"We have so much and we can often get caught up in our little stupid problems. (In Malawi) the kids have nothing to play with."
Madonna also noted the difficulties in adopting from Malawi, saying: "They are still trying to finesse the laws."
Chombo acknowledged the country's rules for foreigners were vague: The 18-to-24-month residency requirement has been assumed to apply to them, though legislation has been proposed to shorten the period to a year for non-citizens.
