The U.S. Court of Appeals for the District of Columbia Circuit reversed a lower court ruling and ordered that the firm, Ralls Corp, be provided the evidence on which Obama had rejected the bid.
Obama had issued an order in 2012 instructing Ralls to sell off its four planned wind farms due to national security risks, the first time since 1990 that a U.S. president has formally blocked a business transaction or required a sale on such grounds.
Ralls, which was installing wind turbines close to an Oregon site used to test unmanned drones, immediately sued.
The firm argued that Obama's order violated the due process clause of the Fifth Amendment to the U.S. Constitution, and said the government had not provided it with the opportunity to review and respond to the evidence used against it.
Experts had predicted the lawsuit had little chance to succeed because of the president's broad powers to protect national security.