A federal grand jury in Alexandria, Va., refused on Thursday to indict New York Attorney General Letitia James, marking the second failed attempt in a week and delivering a significant rebuke to the Trump administration’s aggressive push to prosecute political adversaries.

According to people familiar with the matter, prosecutors again sought charges accusing Ms. James of making false claims on a mortgage application. The grand jury declined, just as another panel had done in Norfolk, Va., exactly one week earlier.

The back-to-back rejections underscore the difficulties facing the Justice Department as it seeks to revive cases tied to President Trump’s retribution campaign, particularly those involving figures who have clashed with him in the past. Legal experts noted that while prosecutors may legally present cases to multiple grand juries, doing so after repeated refusals is highly unusual.

“It’s a pretty strong sign you don’t have a tryable case,” said Bruce Green, a Fordham Law School professor who specializes in legal ethics. He added that most prosecutors “would take a hint” after one rejection, let alone two.

The administration’s repeated attempts stem from an earlier indictment obtained in October by U.S. attorney Lindsey Halligan, a former White House aide whom Mr. Trump installed after removing her predecessor. Last month, a judge ruled that Ms. Halligan’s appointment violated federal vacancy laws, leading to the dismissal of the original case against Ms. James and a parallel one against former FBI director James B. Comey.

Even so, prosecutors pressed forward. On Thursday, federal prosecutor Roger Keller, brought in from Missouri after career DOJ lawyers expressed concerns about the evidence, again presented the allegations to a grand jury. Like the panel in Norfolk, the jurors declined to indict.

The case centers on a home Ms. James purchased in Norfolk in 2020. Prosecutors have alleged she misled lenders by claiming she intended to use the home as a secondary residence while planning to treat it as a rental property—an accusation she has repeatedly called “baseless.” They alleged she received about $18,900 in more favorable mortgage terms as a result. The home has for years been occupied by Ms. James’s great-niece, who testified that she paid no rent.

A lawyer for Ms. James, Abbe D. Lowell, said Thursday’s rejection “makes even clearer that this case should never have seen the light of day,” adding that pursuing the matter further “would be a mockery of our system of justice.”

The refusal marks the third time in just over two months that prosecutors have attempted to bring charges against Ms. James. Grand jury refusals are rare; for two separate panels to reject the same case in rapid succession is even more striking, particularly given that no defense attorney is present during such proceedings and the standard is merely probable cause.

The failed bid comes amid broader turbulence within the Justice Department, including stalled efforts to reindict Mr. Comey. Over the weekend, a federal judge in Washington temporarily barred prosecutors from using key evidence they had relied on in the original indictment—communications between Mr. Comey and his longtime confidant, Columbia law professor Daniel C. Richman. Mr. Richman argued investigators violated his rights by obtaining the material without a warrant.

The judge’s order restricting access to that evidence is set to expire Friday at midnight.

For the Justice Department, the latest rejection raises questions about the viability—and legitimacy—of pursuing cases that career prosecutors have already warned lack sufficient evidentiary support. For Ms. James, the decisions leave her without an indictment and with a growing chorus of legal experts questioning why the case was brought to grand juries in the first place.