The ruling supersedes the Army's decision last year to deny Pfc. Michael Barnes' request. Barnes had told the Army that his religious experience two years ago left him opposed to war in any form.
U.S. District Judge John Sedwick said military investigators failed to provide "a basis in fact" to support their contention that Barnes' religious objections to war were insincere.
Barnes, a 26-year-old native of Portland, Ore., said Monday in a statement released by his lawyer that he was thankful the court found his request was based on his "sincere belief as a Christian."
Barnes enlisted in the Army in March 2005 and arrived in Iraq in September 2006. Soldiers in his unit testified that he devoted much of his spare time to reading the Bible.
"I have been trying to justify being a soldier and finding a way to do so while still being a Christian, because that is what I wanted to do since I was a kid," Barnes wrote in his request for conscientious objector status in December 2006.
"But I can no longer justify spending my short time in this world participating in or supporting war. ... I must try to save souls, not help take them."
Barnes remained in Iraq through the duration of his unit's 15-month deployment. His brigade returned to Anchorage last November.
It was not immediately clear if the Army would appeal the ruling. An Army spokesman late Tuesday could not immediately comment.