US scientists working with human embryonic stem cells found reason for optimism — if not quite full-blown celebration — last week, after a high-ranking court overturned an injunction barring the National Institutes of Health (NIH) from funding their research. The ruling, handed down by the US Court of Appeals for the District of Columbia Circuit, significantly lowers the chances that opponents of the research will ultimately succeed in cutting off federal funding through the courts.

The field was thrown into disarray last August, when a lower court imposed the preliminary injunction while considering whether to permanently bar the government from funding the research (see Nature 467, 12–13; 2010). The action sent researchers supported by the NIH scrambling to suspend experiments and freeze cell lines, and forced the agency to halt peer review of new grant applications and approvals of new cell lines.

Seventeen days later, the appeals court placed a hold on the injunction while it considered the validity of the lower court's action. That restored the status of NIH funding, but left its long-term viability in doubt. This has been eased by the 29 April ruling, in which the appeals court legally formalizes its earlier decision to block the injunction.

It is, however, still possible that Judge Royce Lamberth of the US District Court for the District of Columbia, who issued the original injunction, will ultimately decide in favour of James Sherley and Theresa Deisher, the plaintiffs in the case. Deisher and Sherley, who both study adult stem cells, contend that NIH funding for research on human embryonic stem cells is illegal because it violates the Dickey–Wicker Amendment, a law that prohibits federal funding for research in which embryos are destroyed or discarded. But it will be difficult now for Lamberth to contravene the finding of the higher court that Dickey–Wicker does not ban NIH funding of research involving human embryonic stem cells, so long as they are not derived using federal funds. The three-judge panel of the appeals court concluded, by a two-to-one majority, that the weakness of the plaintiffs' central argument means they are unlikely to prevail when the case is heard on its merits — a key legal standard for granting a preliminary injunction.

The two judges wrote: "the NIH seems reasonably to have concluded that, although Dickey–Wicker bars funding for the destructive act of deriving an ESC [embryonic stem cell] from an embryo, it does not prohibit funding a research project in which an ESC will be used."

The plaintiffs' failure to meet another legal standard for winning the preliminary injunction — demonstrating that the harm they would suffer without it outweighs the harm caused to government-funded researchers if it is granted — clinched the court's decision.

NIH director Francis Collins pronounced himself "delighted and relieved" by the decision. "This is a momentous day — not only for science, but for the hopes of thousands of patients and their families who are relying on NIH-funded scientists to pursue life-saving discoveries and therapies that could come from stem cell research."

Others tempered their optimism with caution. "Although this is great news and an important decision in favour of the patients and researchers who support stem-cell research, we have a long way to go before this is finally resolved," says Tony Mazzaschi, senior director, scientific affairs at the Association of American Medical Colleges in Washington DC.

The plaintiffs can still pursue a hearing by the full appeals court or the US Supreme Court, although the higher courts rarely grant such hearings.

Samuel Casey, a lawyer on the team representing Sherley and Deisher, says that lawyers for the plaintiffs will meet soon to decide their next steps. "We continue to strongly believe we will ultimately prevail in this case," he adds.

But researchers working with human embryonic stem cells hope the threat to their field is abating. "There's been a feeling of excitement tempered by sighs of relief," says George Daley of the Harvard-affiliated Children's Hospital Boston in Massachusetts. On Friday, Daley's e-mail inbox was flooded by messages from colleagues with subject lines such as "yay!" and "good news". Although nothing about the day-to-day work of his lab had changed, Daley says, "emotionally" the atmosphere is different. "We have been waiting for this for a long time."