Rusesabagina, a Belgian citizen and US permanent resident who has been a critic of president Paul Kagame, was charged this week with 13 offences.
These also include financing terrorism, complicity in murder, recruiting child soldiers and forming a rebel group.
If convicted, he faces a maximum of 25 years in prison.
It is not clear when his trial will begin.
The 66-year-old Rusesabagina had asked to be released on bail, citing poor health that has caused him to be taken to a hospital three times since he first appeared in handcuffs in Rwanda on August 31.
“I assure the court that I will not flee from justice,” Rusesabagina said.
But the prosecution argued all detainees are offered the medical treatment they need.
Judge Dorothy Yankurije said the court found it necessary that Rusesabagina remain detained so he does not sabotage investigations.
He said he will appeal against the decision.
We have no hope that he can be given fair justice in Rwanda and ask for his immediate release
The denial of bail further alarmed his family, which along with some human rights and legal groups has expressed concern his arrest is the latest example of Rwanda targeting critics.
“We have no hope that he can be given fair justice in Rwanda and ask for his immediate release,” daughter Carine Kanimba said on social media.
Rusesabagina earlier this week asserted not all charges qualify as criminal offences and said he denied the accusations during questioning by Rwandan investigators.
He distanced himself from the activities of a rebel movement that is the armed wing of his opposition political platform, saying he is not the movement’s leader and that the group’s members should be held responsible.
The armed wing has claimed responsibility for deadly attacks.
Rusesabagina is credited with saving more than 1,000 lives during Rwanda’s 1994 genocide that killed some 800,000 Tutsis and moderate Hutus.
For his efforts he was awarded the US Presidential Medal of Freedom.
But he has faced criticism from Rwandan authorities in the years since he began speaking out against alleged human rights abuses by Kagame’s government.
Neither his Rwandan lawyers – who have been discounted by his family as state-imposed representation – nor the prosecution have explained the circumstances under which Rusesabagina arrived in Rwanda after he visited Dubai.
The Rwandan court said he was arrested at Kigali International Airport, contradicting the earlier police version that he was arrested through “international co-operation”.
Kagame has indicated Rusesabagina may have been tricked into boarding a private plane in Dubai that took him to Rwanda.
Human Rights Watch last week said Rusesabagina had been “forcibly disappeared”, adding the lack of lawful extradition proceedings suggests Rwandan authorities do not believe their evidence would stand up to independent scrutiny.
Government supporters reject Rusesabagina’s criticism over alleged rights abuses, saying Kagame’s leadership supports democracy and economic growth.
