The ruling came as Prime Minister Yingluck Shinawatra struggles to maintain power against opponents who began street protests in November, Voice of America reported.
The government issued a 60-day emergency degree Jan. 21 as protests intensified. The order allows protesters to be jailed for a month without charges.
The court's ruling could further weaken the government if it is unable to find a way to restore order, said Thitinan Pongsudhirak, an associate professor of political science at Chulalongkorn University.
"And it will be in a straitjacket like a sitting duck and something else will come along to either depose it or see Yingluck's resignation," he added.
Anti-government protesters maintained pressure on Yingluck Wednesday, gathering outside the offices of the Defense Secretariat where she has set up a temporary office, CNN reported.
About 1,000 police officers were stationed around the compound.
Demonstrators have blocked access to the prime minister's office in central Bangkok.
On Tuesday, Thailand's anti-corruption commission said it would bring charges against Yingluck, who it said was warned about corruption in a government rice purchasing program but failed to act.