Trump's order called on the Bureau of Prisons to revise its medical policies so that taxpayer dollars aren’t spent “for the purpose of changing an inmate’s appearance to that of the opposite sex.”
That policy would halt surgeries, taper off hormones and end social accommodations like makeup and wigs. Prisons would continue to offer mental health services.
Wednesday's SCOTUS decision leaves in place a lower-court block on the policy.
Justice Samuel Alito and Clarence Thomas would have allowed it to be enforced as the lawsuit played out in lower courts.
The conservative-majority Supreme Court has previously upheld state laws banning certain sex manipulation procedures on young people. The Court has also ruled in favor of state laws restricting biological males playing in women’s sports.