The justices relied on a long-settled understanding of the 14th amendment, adopted after the Civil War, and more recent federal laws in ruling that anyone born in the United States, with very limited exceptions, is a citizen.
The 6-3 ruling marked the second time this year that the court has invalidated a major Trump initiative, following its February decision to strike down his global tariffs.
"Citizenship, then and now, was the right to have rights - to freely participate in our political community. The Framers of the Fourteenth Amendment extended that promise to 'every free-born person in this land'," Chief Justice John Roberts wrote for the court, citing congressional debate over the amendment, "We keep that promise today".
The justices upheld a lower court's decision that blocked Trump's executive order directing US agencies not to recognise the citizenship of children born in the United States if neither parent is a US citizen or legal permanent resident, also called a "green card" holder.
Challengers to Trump's order argued that it violates language in the US constitution's 14th amendment that confers citizenship to those born in the United States who are "subject to the jurisdiction thereof".
During arguments in April, both conservative and progressive justices questioned the administration order's legality in a momentous case that was magnified by Trump's unprecedented attendance in the courtroom.
Trump's order would have upended widely held views that the 14th amendment confers citizenship on everyone born in the United States, excluding only the children of foreign diplomats and those born to a foreign occupying force.
Trump issued the order last year on his first day back in office as part of a suite of policies to curb illegal immigration.
During the arguments, US Solicitor General D John Sauer, representing the administration, said the promise of citizenship for virtually any baby born on US soil has spawned what he called a sprawling industry of "birth tourism".
Sauer said that "uncounted thousands of foreigners from potentially hostile nations have flocked to give birth in the United States in recent decades" to secure citizenship for their children.
Asked to explain how serious an issue "birth tourism" has become, Sauer primarily cited media reports and conceded that "no one knows for sure."
The 14th amendment was ratified in 1868 in the aftermath of the Civil War of 1861 to 1865 that ended slavery in the United States, and overturned a notorious 1857 Supreme Court decision that had declared that people of African descent could never be US citizens.
During arguments, Sauer described what he saw as the limited purpose of the 14th amendment Citizenship Clause, saying it was adopted "to grant citizenship to the newly freed slaves and their children, whose allegiance to the United States had been established by generations of domicile here."
The legal challenge to Trump's directive considered by the Supreme Court, which has a 6-3 conservative majority, involved a class-action lawsuit filed in New Hampshire by parents and children whose citizenship was threatened by the directive.
The Supreme Court weighed in on what it means to be an US citizen just ahead of the July 4 holiday when the United States marks the 250th anniversary of its founding.
Trump urged Congress on Tuesday to end birthright citizenship after the Supreme Court's decision.
"The Supreme Court upheld Birthright Citizenship, which is too bad for our Country, but we can easily make it up in Congress through Legislation," Trump wrote in a post on Truth Social.
with AP
