The Log Cabin Republicans estimate 13,500 gay military service members have been ousted under the rules since 1994.
The decision marks the first time a federal judge has found the law unconstitutional on the grounds of due process and first amendment.
"With this legal victory in hand, Congress is right now in a perfect position to strengthen our national security by ending a law that has discharged thousands of capable service members," said Joe Solmonese, president of the Human Rights Campaign, a gay and lesbian advocacy group. "The Senate can and should vote in the next few weeks to repeal 'Don't Ask Don't Tell.'"
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, Jason Ryan and Steven Portnoy contributed to this report.