UEFA said in a statement on Monday the chairman of its Control and Disciplinary Body had ruled there was a "lack of strong and convincing evidence" that Busquets had twice callled Brazilian Marcelo a monkey, or "mono" in Spanish during last month's semi-final first leg.
In a separate ruling, UEFA dismissed Real's appeal against an earlier decision to reject the club's complaint about what it said was unsporting behaviour by a number of Barcelona players designed to influence the referee.
"The UEFA Control and Disciplinary Body decision to dismiss Real Madrid CF's protest relating to the UEFA Champions League semi-final first leg is upheld by UEFA's Appeals Body," UEFA said in a statement on its website.
Barcelona, who sealed a third straight La Liga title last week, face English Premier League champions Manchester United in the final of Europe's elite club competition at London's Wembley stadium on May 28.
Spain international Busquets could have faced a five-match ban if European football's governing body had found him guilty of abusing Marcelo at Real's Bernabeu stadium.
Barcelona argued in their player's defence that Busquets had not used the word "mono."
What television images of him addressing the Brazilian showed was him saying Marcelo had a lot of nerve, or "mucho morro," the club said.
