The attorney for Scott Dekraai, 42, entered the plea on his behalf in a Santa Ana courtroom.
Prosecutors say Dekraai shot and killed his ex-wife and seven others at Salon Meritage in Seal Beach in October. One other victim was wounded.
"Our position is he was absolutely not insane at the time he committed this crime, and we will be proving that in court," said prosecutor Scott Simmons.
Prosecutors are seeking the death penalty.
Dekraai was involved in a custody dispute with his ex-wife over their 8-year-old son. A pre-trial hearing is set for April.
Dekraai is held without bail