Interior Minister Gerald Darmanin decided to dissolve the Soulevements de la Terre, or Uprisings of the Earth, SLT, in June, after violent clashes with police during a protest in March.
The Council of State said in a statement that dissolving the SLT "undermines the freedom of association."
The court questioned the "legality" of the decision and explained that neither the documents in the file nor the discussions at the hearing lead to considering that the group aims to perpetrate in any way acts of violence against people.
As a result, the Council of State decided to temporarily suspend the government's decision and said the final verdict is due to be given "quickly, probably in the fall."
The government accused the group of organizing sabotage and causing material damage, including through violence, under the cover of supporting the preservation of the environment.
Violent clashes erupted in March at unauthorized protests against the construction of agricultural mega-water reservoirs in the western town of Sainte-Soline.