Wednesday's ruling won't have an immediate impact on access to the drug, with the decision on hold until the Supreme Court decides whether to take up the case.
The court earlier this year issued an emergency order preserving the status quo while the appeals process plays out.
The ruling from a three-judge panel of the U.S. Court of Appeals for the 5th Circuit effectively rolls back changes made since 2016 to ease access to the drug.
Those changes included increasing the gestational age when mifepristone can be used — up to 10 weeks of pregnancy, rather than seven — allowing the medication to be mailed to patients, lowering the dosage and permitting providers other than physicians to prescribe mifepristone.
"In loosening mifepristone's safety restrictions, [the Food and Drug Administration] failed to address several important concerns about whether the drug would be safe for the women who use it. It failed to consider the cumulative effect of removing several important safeguards at the same time," Judge Jennifer Elrod wrote.
The three judges on the 5th Circuit panel were appointed by Republican presidents. During oral arguments in May, they all indicated a willingness to restrict access to the drug.
They did ultimately hand a partial victory to the FDA, but only on procedural arguments. They agreed with the FDA and the Justice Department 2-1 that the challengers waited too long to sue over mifepristone's original approval.
The case is almost certainly heading for the Supreme Court. It marks the highest-stakes legal battle on abortion since the court overturned Roe v. Wade last year.
The parties have 90 days to appeal the latest ruling to the Supreme Court, and the justices will then consider whether to take up the dispute, a process that typically takes weeks, if not longer.
Abortion rights groups were quick to condemn the ruling, noting abortion care in the U.S. will become even more restricted.
Medication abortion currently accounts for more than half of all abortions in the U.S.
Since Roe was overturned, 14 states have implemented abortion bans and another 11 have imposed various limits, including six-week fetal "heartbeat" rules.
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