An 8-1 majority on the Court said that the law was "substantially overbroad, and therefore invalid under the First Amendment," affirming the right of free speech in the face of some government-imposed restrictions.
The government had argued that showing animals being mutilated, tortured or killed was so explicit that it should be banned. But today Chief Justice John Roberts, writing for the majority, said "We disagree."
"The First Amendment itself reflects a judgment by the American people that the benefits of its restrictions on the Government outweigh the costs," Roberts said.
The Humane Society of the United States, which filed a "friend of the court" brief in the case, said it's disappointed by the decision but optimistic Congress will draft a more narrowly targeted law.
"Congress should act swiftly to make sure the First Amendment is not used as a shield for those committing barbaric acts of cruelty, and then peddling their videos on the Internet," said Wayne Pacelle, president of the Society.
The ruling effectively throws out the conviction of 69-year-old Robert Stevens, a documentary film producer at the center of the case who had argued for the right to sell videos depicting dogfighting to educate the public about pit bulls.
"Mr. Stevens is pleased and extremely grateful for the Supreme Court's thoughtful consideration of his case," said Stevens' attorney Patricia Millett. "Acts of animal cruelty are abhorrent and rightly condemned. Laws banning such conduct remain fully protected, as they should. But we cannot forget how critical the free flow of information is to educating the public about the problems of animal cruelty and the need for legislative and prosecutorial action to combat it."
Stevens' business, Dogs of Velvet and Steel, has been operated out of his rural Virginia home where he produced numerous videos about the animals.
In one video, Stevens, sitting in a rocking chair, talks about tapes shot in Japan in the early 1950s or 1960s. It is clear that Stevens is not taping the fight, but providing after-the-fact narration.
"I cannot emphasize enough that this video in no way promotes dogfighting or gambling," he said in one scene.
Stevens' lawyers had argued he included the violent, but apparently bloodless, footage to represent what he sees as the admirable traits of the breed.
His narration does provide a play-by-play of the dogs fighting each other. At one point Stevens says, "You know who my pick is."
Stevens marketed his films on his Web site, www.pitbulllife.com.
The violent depictions in the videos are what landed Stevens in trouble with animal rights organizations under federal law.
He was convicted and sentenced to 37 months imprisonment for violating a 1999 federal law that prohibits "knowingly selling depictions of animal cruelty, with the intention of placing them in interstate commerce." The law was passed to target the problem of animal cruelty.
A federal appeals court invalidated his sentence and the statute. Today the top court affirmed that ruling.
In his opinion Justice Roberts acknowledged that the First Amendment has "permitted restrictions upon the content of speech in a few limited areas" such as obscenity, defamation and fraud, but that the depictions of animal cruelty should not be added to the list.
"Maybe there are some categories of speech that have been historically unprotected, but have not yet been specifically identified or discussed as such in our case law," Roberts wrote, "but if so, there is no evidence that "depictions of animal cruelty" is among them."
Only Justice Samuel Alito dissented writing, "The Court strikes down in its entirety a valuable statue, that was enacted not to suppress speech, but to prevent horrific acts of animal cruelty"
The case has ignited debate about what kinds of speech should be protected.
The last time the Supreme Court addressed the issue was in 1982 when it carved out an exception to the First Amendment on the issue of child pornography.
In court briefs, the government links obscenity laws with animal cruelty and argues that neither merits protection from speech.
Solicitor General Elena Kagan wrote, "Like obscenity, the depictions are of patently offensive conduct that appeals only to the basest instincts."
But lawyers for Stevens argued that the case was not about dogfighting.
"What this case is about is whether Congress can create whole new categories of speech not protected by the First Amendment," said Stevens' lawyer Robert Corn-Revere. "It's creating a whole new category that has never been recognized as unprotected by the First Amendment."
Some First Amendment supporters have come to Stevens' defense, worrying about restrictions the government can place on speech.
In a brief filed by the Thomas Jefferson Center for the Protection of Free Expression, lawyers wrote that it is wrong for the government to equate protecting children from sexual abuse with the interest of protecting animals from inhumane treatment.
"Morals, values, religious beliefs, customs and laws compel adult Americans to provide far greater protection to children than they do to animals or even other adults," the group's lawyers wrote.
However, the Humane Society argued that Stevens' lawyers were trying to mislead people and that Congress dealt with the problem narrowly.
"The law at issue doesn't cover anything that has any journalistic, educational, artistic or social value," says the groups' lawyer, Jonathan Lovvorn. "When you strip away all the hysteria and rhetoric, this is a narrow law that only applies to those trafficking obscene materials over state lines."
Lovvorn said that even though Stevens claims he was against dogfighting, his efforts to depict images of it and sell them across county lines contributed to animal cruelty.
"If you dry up the interstate market for this material, it will reduce the underlying criminal activity," Lovvorn said.
ABC News' Devin Dwyer contributed to this report.