Phillips' ruling has put the administration in an awkward position. On the one hand it was defending the statute in Court, on the other hand it was hoping Congress would act to repeal the policy.
The House approved a repeal as part of the annual defense budget earlier this year, but the Senate failed to approve the measure in a vote last month.
"The Justice Department is defending the statute as it traditionally does when Acts of Congress are challenged," said an agency spokesperson in a statement about the case.
And White House press secretary Robert Gibbs has said the administration's legal defense of the law "in no way diminishes the president's firm commitment to achieve a legislative repeal of DADT."
President Obama has previously called the ban on openly gay and lesbian service members a "discriminatory policy" and pledged that ending it would be a promise "that this administration is going to keep."
Justice Department lawyers appeared to merely go through the motions when the "don't ask don't tell" case went to trial before Judge Phillips in July, calling no witnesses or offering other evidence for its defense.
"It'll be an interesting decision for our president to decide whether to appeal this case," the plaintiffs' attorney, Dan Woods, told the Associated Press. "He's said that 'don't ask, don't tell' weakens national security, and now it's been declared unconstitutional. If he does appeal, we're going to fight like heck."
The case was brought in 2004 by the Log Cabin Republicans, which argued that the military's 17-year-old policy violates gay service members' rights to free speech, open association and due process. Judge Phillips agreed.
The Log Cabin Republicans estimate 13,500 gay military service members have been ousted under the rules since 1994.
Phillips' decision marked the first time a federal judge has found the law unconstitutional on the grounds of due process and first amendment.
Seventy-five percent of Americans say gays who disclose their sexual orientation should be allowed to serve in the military, according to a recent ABC News/Washington Post poll, up from 44 percent 17 years ago.
ABC News' Luis Martinez and Jason Ryan contributed to this report.