The Supreme Court allowed US President Donald Trump's broad restrictions on transgender people serving in the military to go into effect while the legal battle continues in lower courts.
The justices lifted nationwide injunctions that had kept the Administration's policy from being implemented.
It reversed an Obama Administration rule that would have opened the military to transgender men and women and instead barred those who identify with a gender different from the one assigned at birth and who are seeking to transition.
The court's five conservatives - Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Brett Kavanaugh - allowed the restrictions to go into effect while the court decides whether to consider the merits of the case.
The liberal justices - Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan - would have kept the injunctions in place.
"As always, we treat all transgender persons with respect and dignity," said Air Force Lieutenant Colonel Carla Gleason, a Pentagon spokeswoman.
The Defence Department's "proposed policy is NOT a ban on service by transgender persons. It is critical that DoD be permitted to implement personnel policies that it determines are necessary to ensure the most lethal and combat effective fighting force in the world. DoD's proposed policy is based on professional military judgment and will ensure that the US Armed Forces remain the most lethal and combat effective fighting force in the world."
Department of Justice spokeswoman Kerri Kupec said:"We are pleased the Supreme Court granted stays in these cases, clearing the way for the policy to go into effect while litigation continues. The Department of Defence has the authority to create and implement personnel policies it has determined are necessary to best defend our nation. Due to lower courts issuing nationwide injunctions, our military had been forced to maintain a prior policy that poses a risk to military effectiveness and lethality for over a year."
Lambda Legal Counsel Peter Renn said the Supreme Court's decision was "perplexing to say the least: on the one hand, denying the Trump Administration's premature request for review of lower court rulings before appellate courts have ruled and rebuffing the Administration's attempt to skirt established rules; and yet on the other allowing the Administration to begin to discriminate, at least for now, as the litigation plays out.
"For more than 30 months, transgender troops have been serving our country openly with valour and distinction, but now the rug has been ripped out from under them, once again."
Trump surprised even his own military advisers in July 2017 when he announced via Twitter a sweeping ban on transgender people's military service. He cited what he viewed as the "tremendous medical costs and disruption".
The Administration's order reversed President Barack Obama's policy of allowing transgender men and women to serve openly and receive funding for sex-reassignment surgery.
Lawyers for active-duty service members went to court to block the policy shift, which could subject current transgender service members to discharge and deny them certain medical care.
The court rulings were met with another policy revision from then-Secretary of Defence Jim Mattis, who issued a plan to bar from the military those who identify with a gender different from their birth gender and who are seeking to transition.
Mattis's plan makes exceptions, for instance, for about 900 transgender individuals who are already serving openly and for others who would serve in accordance with their birth gender.
While several lower courts have blocked the policy, the changes were persuasive to a panel of the US Court of Appeals for the DC Circuit, which became the first appeals court to review the policy.
"The government took substantial steps to cure the procedural deficiencies" previously identified by a lower court, the panel said in a short order. "Although the Mattis Plan continues to bar many transgender persons from joining or serving in the military, the record indicates that the plan allows some transgender persons" previously barred to join and serve.
The policy is not a "blanket ban," the court concluded, because "not all transgender persons seek to transition to their preferred gender or have gender dysphoria."