A source close to McCabe's legal team said they received an email from the Justice Department reading, "The Department rejected your appeal of the United States Attorney’s Office’s decision in this matter. Any further inquiries should be directed to the United States Attorney’s Office."
Another source familiar with the matter confirms that the appeal was rejected.
It was still unclear as of Thursday afternoon if the Justice Department had asked a federal grand jury to indict McCabe — and, if so, what the grand jurors decided.
McCabe's attorney Michael Bromwich sent two emails to senior DOJ officials Thursday, seeking clarity on where McCabe stands.
McCabe's legal team urged DOJ to say publicly that a federal grand jury declined to indict McCabe -- if in fact that's the case. And they again urged DOJ not to try to indict him again, insisting if it's true that prosecutors couldn't persuade a grand jury to indict, then they won't be able to persuade a trial jury to convict.
McCabe, who served as the acting FBI director immediately following the firing of James Comey, has said he personally authorized the counterintelligence and criminal investigation of President Trump in May 2017 over fears he would too be removed from the position.
McCabe was fired from the FBI in March of 2018 just hours before his retirement, after the Department of Justice's inspector general released a report determining that he misled investigators while under oath.
The IG said McCabe "lacked candor" specifically about conversations he had regarding a disclosure to the Wall Street Journal about the bureau's investigation of the Clinton Foundation, and referred its findings to federal prosecutors in the spring of 2018.
McCabe has said he never "knowingly misled or lie[d]" to the investigators, but has also acknowledged he lacked clarity and had to correct some of his responses.
Last month, McCabe filed a civil suit against the DOJ and FBI arguing his firing as unjust and politically motivated due to public pressure from President Trump.
President Trump has long targeted McCabe as a political enemy and evidence of political bias in the upper echelons of the FBI early in his administration.
Over Twitter, Trump has repeatedly encouraged a criminal investigation of McCabe.
The Department of Justice and FBI did not immediately respond to ABC News' request for comment on the McCabe development.