Donald Trump's crackdown on transgender troops serving in the US military has been ruled illegal by a federal court in a fresh blow to the White House's agenda.
The ruling came from a divided three-judge panel of the US Court of Appeals for the District of Columbia circuit on Monday.
Judges claimed the Trump administration specifically drummed up the policy to bar individuals from serving based on their gender identity.
Though despite their ruling, the ban remains in place - for now.
The US Supreme Court allowed the block to go ahead year whilst legal challenges work their way through the courts.
Additionally, the appeals court has stayed its own decision pending any further appeals.
The ruling would protect transgender plaintiffs already serving in the armed forces, though it would not extend to those attempting to enlist.
This means the military still has the ability to block new transgender recruits from joining.
The panel voted 2-1 to largely affirm a March 2025 decision by US District Judge Ana Reyes in Washington DC.
Judge Reyes had determined that Mr Trump's executive order barring transgender troops probably infringes upon their constitutional rights.
The Trump administration then launched an appeal following Mr Reyes's preliminary injunction, which had been sought by lawyers representing several transgender active-duty service members and prospective recruits.
The appeals court majority opted to limit the injunction's scope to serving personnel rather than those seeking to join.
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A separate legal challenge to the ban was brought in Washington state, where the court also ruled against the policy.
The President signed an executive order in January 2025 confirming the sexual identity of transgender service members "conflicts with a soldier's commitment to an honorable, truthful, and disciplined lifestyle, even in one's personal life" and undermines military readiness.
Defence Secretary Pete Hegseth then barred individuals with "gender dysphoria" from serving.
Gender dysphoria refers to the psychological distress experienced when a person's assigned gender does not align with their gender identity, a condition associated with depression and suicidal ideation.
Reacting to the ruling on social media, Mr Hegseth bluntly declared: "See you at SCOTUS."
Judge Robert Wilkins, an Obama appointee who authored the majority opinion, wrote that the policy "appears to be driven by the bare desire to harm a politically unpopular group: persons who identify as transgender."
Judge Justin Walker, a Trump appointee, dissented from the ruling.
"We have neither the expertise nor the authority to decide whether the military can exclude the plaintiffs from its ranks. The Constitution assigns that authority to Congress and the Commander in Chief," Walker wrote.
Judge Judith Rogers, appointed by President Bill Clinton, joined the majority but also partially dissented.
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