Ilkeston has missed out on becoming a Portas Pilot town and up to £100,000 funding to regenerate the town centre.
The money was being offered along with the help of retail guru Mary Portas and a team of experts.
Towns who made winning bids were announced on Saturday.
Paul Calladine, market towns co-ordinator, said: “Unfortunately we missed out this time.
“It is disappointing but we will definitely be going for the second round of funding.”
370 applications were made for the regeneration grants.
Another twelve towns will be awarded cash when a second batch of pilot towns are announced in July.
The Ilkeston Town Team are currently discussing whether to resubmit their existing application as it is or make changes before the new deadline.
Mary Portas said: “It is now clearer to me than ever that Britain wants its town centres revitalised.”