"There is still a realistic possibility that confinement might cause her to testify," U.S. District Judge Thomas Hogan said of the showdown in a case that has seen both President Bush and Vice President Dick Cheney interviewed by investigators.
CBS News Correspondent Jim Stewart reports Miller said: "I won't testify. The risks are too great. The government is too powerful."
Hogan then responded: "If we give her a pass this time ... then we are on a very slippery slope that leads to anarchy."
Miller stood up, hugged her lawyer and was escorted from the courtroom.
Earlier, Time magazine reporter Matthew Cooper, in an about-face, told Hogan that he would cooperate with a federal prosecutor's investigation into the leak of the identity of CIA operative Valerie Plame. He said he would do so now because his source gave him specific authority to do so.
"Last night I hugged my son goodbye and told him it might be a long time before I see him again," Cooper said as he took the podium to address the court.
"I went to bed ready to accept the sanctions" for not testifying, Cooper said. But he told the judge that not long before his early afternoon appearance, he had received "in somewhat dramatic fashion" a direct personal communication from his source freeing him from his commitment to keep the source's identity secret.
As for Miller, "There will be no appeal now, all the appellate issues were exhausted last week when the Supreme Court refused to get involved in the case," reports CBS News Legal Analyst Andrew Cohen. "So in the absence of a deal with the feds, Miller will be in jail until the judge releases her, probably when the grand jury involved in the case disbands this fall.
"After some time has passed, after Miller has been in jail for a number of weeks or even months, Miller's attorneys can go back to court to try to convince the trial judge that the time for leniency has come. But unless the prosecutor backs up that request I don't think it'll have much traction."
The judge speculated that Miller's confinement might cause her source to give her a more specific waiver of confidentiality, as did Cooper's.
Cooper, talking to reporters afterward, called it "a sad time."
"My heart goes out to Judy. I told her as she left the court to stay strong," Cooper added. "I think this clearly points out the need for some kind of a national shield law. There is no federal shield law and that is why we find ourselves here today."