A US judge has ruled that Montana's TikTok ban violated users' free expression rights.
Montana became the first US state to enact the ban, which was set to go into force on January 1st.
The short-video sharing app, owned by China's ByteDance, sued Montana a week later.
TikTok, according to US District Judge Donald Molloy, "violates the Constitution in more ways than one" and "oversteps state power."
The regulation would have made it unlawful for app shops to sell TikTok, with companies facing fines of up to $10,000 (£7,097).
TikTok expressed satisfaction with the rejection of the "unconstitutional law" to the BBC.
It went on to say that "hundreds of thousands of Montanans can continue to express themselves, earn a living, and find community on TikTok."
According to Reuters, Montana's state attorney's office is pondering its next moves "to defend the law that protects Montanans from the Chinese Communist Party obtaining and using their data."
Montana, which has a population of just more than one million people, banned the app on government devices in December of last year.
TikTok claims 150 million American users, the vast majority of whom are in their teens and twenties.
Concerns that data might be shared with the Chinese government have prompted authorities throughout the world to scrutinize the software.
In March, a congressional committee questioned its CEO, Shou Zi Chew, about the possibility.
Shou has stated several times that TikTok will never snoop on Americans. However, he disclosed that workers had been monitoring journalists' accounts.
Earlier this month, the US authorities stated that ByteDance could either sell TikTok or risk a ban in the nation.
Nepal, like India, banned TikTok last month because its material "was detrimental to social harmony."
ByteDance has often denied that the company is under the influence of the Chinese government.