The ruling by U.S. District Judge James Gwin in Washington, D.C., also said the government must defend a pending plan for a 2-mile fence that would separate the Pryor Mountain Wild Horse Range from U.S. Forest Service Land.
The range along the Wyoming border south of Billings has about 150 horses that trace their lineage in part to the mounts used by Spanish Conquistadors.
The Department of Interior had won a previous legal round in the case, when the court allowed the agency to conduct a roundup last fall. Fifty-seven horses were sold or put up for adoption.
In his order Wednesday, Gwin said horse advocates from Colorado could amend their lawsuit to challenge future roundups, also known as gathers.
The plaintiffs want more environmental studies done before the roundups by the Bureau of Land Management , which operates under the Department of Interior. Officials defend the practice as necessary to prevent overgrazing and overcrowding on rangeland across the West.
If Gwin ultimately sides with the horse advocates, such a ruling could have broad implication's for a program that captures thousands of wild horses annually, said plaintiff's attorney Bruce Wagman in San Francisco.
There are an estimated 69,000 wild horses and burros in the United States, including 37,000 that roam public lands. About 32,000 are held in corrals and long-term pastures overseen by the government.
The government is working to remove about 20,000 of the free-roaming horses by the end of next year. Those roundups, held across the West, have faced determined opposition from horse advocates.
The case involving the Pryor horses brings the U.S. Department of Agriculture into the mix, because of its plan to fence out portions of the herd from Custer National Forest.
Ginger Kathrens with the Colorado-based Cloud Foundation, one of the plaintiffs in the case, said the planned fence would cut off the horses from public lands that provide crucial pasture.
"Without that part of the range, it really threatens the survival of the wild horses," she said.
Forest Service officials said the fence was needed to keep the animals off land they did not occupy prior to the 1971 passage of the Wild Free-Roaming Horses and Burros Act.
"Wild horses can only be managed on areas of public lands where they were known to exist in 1971," the agency stated in a May, 2009 document.
Kathrens and others contend the horses have been on the Forest Service land "since before there was a Forest Service."