They threw out six drafts of the bill which would have allowed Tymoshenko to travel abroad for medical treatment.
The EU made her release a condition for signing a historic deal on closer ties with Ukraine next week.
But Ukraine came under intense pressure from Russia not to sign.
Russia wants Ukraine to join its own customs union with Kazakhstan and Belarus, which it sees as a prototype rival to the European Union.
The bill failed to pass after MPs from President Viktor Yanukovych's ruling Regions Party refused to cast their votes on any of the six proposed drafts.
"It is President Viktor Yanukovych who is personally blocking Ukraine's movement toward the European Union," Arseniy Yatsenyuk, parliamentary leader of Tymoshenko's opposition Fatherland group, told parliament after the vote failed.
The drafts all fell short of the 226 votes needed.
Opposition MPs responded by shouting "shame" as the bill was thrown out.
The legislation was put forward on the treatment of convicts abroad.
Tymoshenko, 52, is serving seven years in jail after a controversial conviction on charges of abuse of power over a gas deal with Russia.
The EU has made clear it believes the judicial campaign against Tymoshenko has been politically motivated.
She has been urging the authorities to transfer her to a German hospital so that doctors there can treat her chronic back pain.
The EU is demanding her release as one of the conditions for signing an EU-Ukraine trade and partnership agreement in Vilnius, Lithuania, which starts on 28 November.
It has been attempting to build closer relations with neighbours that were once part of the Soviet Union, and is expected to initial but not yet formally sign association agreements with Georgia and Moldova.
- 1960 - Born in Dnipropetrovsk, industrial city in eastern Ukraine
- 1979 - Trained as engineer and economist
- 1990s - Runs United Energy Systems of Ukraine and becomes very rich
- 1999-2001 Serves in energy ministry but falls out with government of Leonid Kuchma
- 2004 - Kuchma candidate Viktor Yanukovych elected president, but result widely condemned as rigged
- 2004 - Huge "Orange Revolution" street protests led by Tymoshenko and ally Viktor Yushchenko defeat Yanukovych, in a blow to Russia
- 2005 - Tymoshenko becomes PM but relations sour with President Yushchenko
- 2010 - Yanukovych beats her in presidential election
- 2011 - Jailed for seven years for abuse of power, over gas deal with Russia