"It cannot go unchecked when, as here, the President wields it through an executive edict that stands to cause irreparable harm to individuals across this nation," Gregory writes.
Both the White House and Department of Justice released statements critical of the decision Thursday, with Attorney General Jeff Sessions pledging that his department "will seek review of this case in the United States Supreme Court."
"This Department of Justice will continue to vigorously defend the power and duty of the Executive Branch to protect the people of this country from danger," read the department's statement.
The White House wrote that the country needs "every available tool at our disposal to prevent terrorists from entering the United States and committing acts of bloodshed and violence."
"As Judge Shedd's dissent notes, 'the real losers in this case are the millions of individual Americans whose security is threatened on a daily basis by those who seek to do us harm,'" the White House statement continued. "We are confident the President's executive order to protect the country is fully lawful and ultimately will be upheld by the Judiciary."
The appellate court took the deepest dive yet into the issue of whether statements made by candidate Trump should be considered in evaluating the executive order he issued after he became president.
"The campaign statements here are probative of purpose because they are closely related in time, attributable to the primary decision maker, and specific and easily connected to the challenged action," read the majority opinion.
"In this highly unique set of circumstances, there is a direct link between the President’s numerous campaign statements promising a Muslim ban that targets territories, the discrete action he took only one week into office executing that exact plan," the opinion added.
"These statements, taken together, provide direct, specific evidence of what motivated both [the original and revised travel bans]: President Trump’s desire to exclude Muslims from the United States," wrote Gregory. "We need not probe anyone's heart of hearts to discover the purpose of [the order], for President Trump and his aides have explained it on numerous occasions and in no uncertain terms."
The judges found that the Trump administration's alleged intent to discriminate against Muslims could violate the Establishment Clause of the Constitution, which prohibits the government from favoring one religion over another.
The court's opinion additionally found that the government's national security justifications for parts of the ban inadequate. The travel ban's "text does little to bolster any national security rationale: the only examples it provides of immigrants born abroad and convicted of terrorism-related crimes in the United States include two Iraqis," even though Iraq is no longer a designated country under the ban, and "a Somalian refugee who entered the United States as a child and was radicalized here as an adult," Gregory wrote.
The panel further examined the travel ban's impact on plaintiffs who are Muslim Americans or permanent U.S. residents. An unnamed "John Doe" plaintiff has applied for a spousal immigration visa for his wife, an Iranian national. He is “feeling the direct, painful effects of the Second Executive Order—both its alleged message of religious condemnation and the prolonged separation it causes between him and his wife—in his everyday life,” the decision stated.
ABC News' Katherine Faulders contributed to this report.