Supporters of the ban said they would appeal the judgment, calling it "out of step with every other federal appellate and Supreme Court decision." Their appeal is likely to keep gay marriage in the state on hold pending future proceedings.
But the lawyers who won the appeals court round called the decision a milestone, and outside City Hall in San Francisco, a center for gay rights, dozens of same-sex couples hugged and kissed in public, cheering the ruling.
"It means we are included in the American Dream," said Joe Capley-Alfano, who married his husband, Frank, in the summer of 2008, a window of legal same-sex marriage in California.
The majority in the 2-1 decision by the 9th U.S. Circuit Court of Appeals ruled that California's Proposition 8 ban did not further "responsible procreation," which was at the heart of the argument by the ban's supporters.
"Proposition 8 serves no purpose, and has no effect, other than to lessen the status and human dignity of gays and lesbians in California, and to officially reclassify their relationships as inferior to those of opposite-sex couples," the ruling reads.
But the appeals court did not address whether marriage was a fundamental right available to same-sex couples as well as heterosexuals, focusing instead specifically on Prop 8.
Some lawyers predicted that the narrow ruling would lead the Supreme Court to limit itself to deciding on the California measure or to refusing the case altogether.
Gay rights supporters have traveled a bumpy road since the first legal U.S. gay marriage was conducted in Massachusetts in 2004. Some courts and legislatures have extended those rights, but voters have consistently opposed gay marriage.
California, the most populous state, joined the vast majority of U.S. states in outlawing same-sex marriage in 2008, when voters passed the ban known as Proposition 8.
That socially conservative vote by a state more known for hippies and Hollywood was seen as a watershed by both sides of the so-called culture wars, and two gay couples responded by filing the legal challenge currently making its way through the federal courts.
A federal judge in San Francisco struck down Proposition 8 in 2010, and gay marriage opponents appealed that ruling to the 9th U.S. Circuit Court of Appeals.
Opponents of gay marriage have not decided whether to ask a larger 9th Circuit panel to hear the matter, or appeal directly to the Supreme Court, Andrew Pugno, general counsel for Protect Marriage and a lawyer on the team, said by email.
Court rules allow at least two weeks before a ruling takes effect, so same sex marriages cannot immediately resume in California, court spokesman Dave Madden said.
BROADER QUESTION NOT AT ISSUE
In the ruling, Judge Stephen Reinhardt focused on the unique circumstances of Prop 8 in California, and whether voters had a legally valid reason for passing it.
Backers of Prop 8 had said that it would advance better child-rearing, but Reinhardt said the only effect of the measure was to deny same-sex couples the right to describe their relationship as a "marriage."
"Proposition 8 therefore could not have been enacted to advance California's interest in childrearing or responsible procreation," he wrote, "for it had no effect on the rights of same-sex couples to raise children or on the procreative practices of other couples."
Judge Michael Daly Hawkins joined Reinhardt's opinion, while Judge N. Randy Smith dissented from the main constitutional findings. Hawkins and Reinhardt were appointed by Democrats, and Smith by a Republican.
"The optimal parenting rationale could conceivably be a legitimate governmental interest" for passing the gay marriage ban, wrote Smith. "I cannot conclude that Proposition 8 is 'wholly irrelevant' to any legitimate governmental interests."
Ted Boutrous, a lawyer on the anti-Prop 8 team, said at a news conference that the focus on California's specific circumstances might lead the Supreme Court to avoid the case.
"The way the court wrote the decision will make it that much harder for the proponents to get Supreme Court review," he said.
But Jesse Choper, a University of California, Berkeley, Constitutional law professor disagreed that the ruling would affect whether the high court took the case. However, the Supreme Court justices also might prefer a chance to limit any ruling to California, he said.
About 40 of the 50 U.S. states had outlawed gay marriage before a California state court ruled in 2008 that a ban was unconstitutional, leading to a summer of gay marriages. But California voters that November decided to change the state constitution to limit marriage to a man and woman.
That provoked some gay rights activists to take a matter that had been waged on a state-by-state basis to federal court, essentially staking the entire agenda on one case.
The U.S. Supreme Court is seen as a more conservative body than the lower courts that have been considering the case. Should the high court eventually decide to hear the case, much may depend on Anthony Kennedy, a Republican-appointed justice who has written important pro-gay rights decisions but has not explicitly endorsed gay marriage.
Six states - New York, Massachusetts, Connecticut, Vermont, New Hampshire and Iowa - allow gay marriage, as does Washington, D.C. In addition, about 18,000 same-sex couples married in California during the summer of legalization in 2008, and their unions are valid regardless of the outcome of the Prop 8 case.
New Jersey, Maryland and Washington state are considering legislation to legalize same-sex marriage, and gay rights activists in Maine say they plan to bring the issue to voters in a referendum in that state.
(Additional reporting by Malathi Nayak in San Francisco and R.T. Watson in Los Angeles; Editing by Cynthia Osterman and Jackie Frank)