The Glostrup court said Wednesday that the man fondled the teenagers while sleeping in his suburban Copenhagen apartment after a party in 2011.
The girls awoke and interrupted the man, and later reported him to police.
But the court cleared the 31-year-old of sex crimes charges, saying medical tests show he suffers from "sexsomnia" in which a person engages in sexual activity while asleep.
Michael Laub, a Danish sleep specialist who wasn't involved in the case, said it's a rare but widely recognized sleep disorder.
The defendant said he had no recollection of what happened.
Prosecutor Martin von Buelow said he wouldn't appeal the ruling.
More Nation & World Headlines
Debris linked to missing Malaysian 777 777 departs Aleutians after emergency landing Export-Import Bank excluded from highway bill House approves highway funding bill Taliban leader Mullah Omar dead, Afghans say Administration wants to give prisoners access to Pell grants GOP leaders plan Senate vote on Planned Parenthood fed aid 8 children hurt, 2 critical, by falling tree in California
Our new comment system is not supported in IE 7. Please upgrade your browser here.