Thursday's ruling dismissed a challenge by Health Minister Edwin Poots, the Belfast Telegraph reported. Poots asked the Court of Appeal to overturn a ruling by the Belfast High Court.
John O'Doherty, executive director of The Rainbow Project, welcomed the decision. He said that previously gay couples who wanted to adopt had to choose between public recognition of their relationship in civil unions or becoming adoptive parents.
"Personal moral prejudices against same-sex-attracted people are not a good enough reason to deny a child loving parents and never will be," he said.
Lord Justice Paul Girvan said barring all couples but those legally married from adoption is "irrational." He said the ban on gay adoption also cut the pool of potential parents.
The Northern Ireland Human Rights Commission challenged the ban on behalf of an unidentified woman.