In a joint statement, Britain, France, Germany, Sweden and the Netherlands said analyses of samples from Navalny's body "conclusively" confirmed the presence of epibatidine, a toxin found in poison dart frogs in South America and not found naturally in Russia.
The Russian government, which has repeatedly denied any responsibility for Navalny's death, dismissed the latest allegations as "a Western propaganda hoax," according to the Russian state's TASS news agency.
The Russian embassy in London said: "One must ask what kind of person would believe this nonsense about a frog".
Britain said the poisoning demonstrated "an alarming pattern of behaviour".
The country held a public inquiry into the poisoning in Britain of Russian double agent Sergei Skripal in 2018.
It concluded last year Russian President Vladimir Putin must have ordered the Novichok nerve agent attack.
"When the test results are available and the formulas for the substances are disclosed, we will comment accordingly," Russian Foreign Ministry spokesperson Maria Zakharova was quoted as saying by TASS.
"Until then, all such assertions are merely propaganda aimed at diverting attention from pressing Western issues," the news agency cited her as saying.
The report also said she described Navalny as a blogger "officially designated as a terrorist and extremist in Russia".
British Foreign Minister Yvette Cooper told reporters that "UK scientists worked with our European partners to pursue the truth" on Navalny's death.
Russian opposition leader Navalny died in an Arctic prison colony in February 2024, after being convicted of extremism and other charges, all of which he denied.
His death was announced minutes before the opening of the Munich Security Conference in 2024.
In response, the conference made a rare schedule adjustment to allow his widow, Yulia Navalnaya, to address the conference and she called for Putin to be held accountable.
"I was certain from the first day that my husband had been poisoned, but now there is proof ... I am grateful to the European states for the meticulous work they carried out over two years and for uncovering the truth," she said on X while attending the Munich security conference on Saturday.
"Vladimir Putin is a murderer. He must be held accountable for all his crimes," she wrote.
The Russian embassy spokesperson said the European allies' move was "not a quest for justice but a mockery of the dead".
"Even after the death of the Russian citizen, London and the European capitals cannot allow him to rest in peace - a fact that speaks volumes about those who instigated this campaign," the spokesperson added.
Saturday's statement from the European allies, almost exactly two years after Navalny's death, said Moscow had the means, motive and opportunity to administer the poison as Navalny died in prison.
"Russia claimed that Navalny died of natural causes. But given the toxicity of epibatidine and reported symptoms, poisoning was highly likely the cause of his death," the statement said.
His death was followed by memorial gatherings and protests across Europe, with demonstrators in cities including London, Berlin, Vilnius and Rome condemning the Kremlin and demanding accountability.
The joint statement added that the latest findings underlined the need for Russia to be held accountable for "its repeated violations of the Chemical Weapons Convention and, in this instance, the Biological and Toxin Weapons Convention".
