Techno Design will also have to pay damages, with the amount to be determined at a later stage.
Making mp3 files available on the internet is illegal under Dutch law, where it is done without the permission of the copyright owner.
A warning to users on zoekmp3.nl not to infringe copyright did not excuse Techno Design from liability. "Such a warning ignores the reality that the lion's share of visitors are looking for unauthorised MP3 files," the court said.
"There has been concern that Holland could become a centre of Internet piracy, but this decision shows that the Dutch courts will not tolerate websites building a business out of facilitating copyright infringement," said General Counsel Geoff Taylor of the International Federation of Phonogram and Videogram Producers (IFPI).
Other deep link websites have been found to be illegal in Australia (mp3s4free.net) and China (Baidu), according to IFPI.
The case was brought to the appeals court by BREIN, a Dutch anti-piracy organisation, after an earlier ruling in favour of the website at the Haarlem court in 2004.