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A federal appeals court today refused to reinstate President Donald Trump's ban on travellers from seven predominantly Muslim nations.
US District Judge James Robart in Seattle issued a temporary restraining order halting the ban last week after Washington state and Minnesota sued.
The ban temporarily suspended the nation's refugee programme and immigration from countries that have raised terrorism concerns.
Justice Department lawyers appealed to the 9th Circuit, arguing that the president has the constitutional power to restrict entry to the United States and that the courts cannot second-guess his determination that such a step was needed to prevent terrorism.
The states said Trump's travel ban harmed individuals, businesses and universities.
"Has the government pointed to any evidence connecting these countries to terrorism?" Judge Michelle T. Friedland, who was appointed by President Barack Obama, asked the Justice Department attorney.
The lower-court judge temporarily halted the ban after determining that the states were likely to win the case and had shown that the ban would restrict travel by their residents, damage their public universities and reduce their tax base. Robart put the executive order on hold while the lawsuit works its way through the courts.
After that ruling, the State Department quickly said people from the seven countries - Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen - with valid visas could travel to the US.
The decision led to tearful reunions at airports round the country.
Presdient Trump is not taking the news well and tweeted "SEE YOU IN COURT, THE SECURITY OF OUR NATION IS AT STAKE!" on his personal Twitter account.
The ban was set to expire in 90 days, meaning it could run its course before the court would take up the issue.
The administration also could change the order, including changing its scope or duration.