The justices, on a 9-0 vote in a closely watched case involving prisoner Gregory Holt, rejected the state's reasoning that the policy was needed for security reasons to prevent inmates from concealing contraband.
Holt, who wanted to grow a 1.3 cm, is serving a life sentence for burglary and domestic battery at the Varner Supermax prison, according to the Arkansas Department of Correction. In 2005, he pleaded guilty to separate charges of threatening the daughters of then-President George W. Bush.
Holt, without any legal representation at the time, persuaded the court to hear his case by filing a handwritten petition.
Justice Samuel Alito, writing on behalf of the court, said the state already searches clothing and hair and had not given a valid reason why it could not also search beards.
Alito wrote that the prison's "interest in eliminating contraband cannot sustain its refusal to allow petitioner to grow a half-inch beard."
Holt said the state's prison grooming policy prohibiting inmates from having facial hair other than a "neatly trimmed mustache" violated his religious rights under a 2000 federal law called the Religious Land Use and Institutionalized Persons Act.
His lawyers noted that more than 40 states and the federal government allow prison inmates to have similar beards.
Eric Rassbach, a lawyer for the Becket Fund for Religious Liberty, a religious rights legal group that helped represent Holt, called the ruling "a huge win for religious freedom."
"What the Supreme Court said today was that government officials cannot impose arbitrary restrictions on religious liberty just because they think government knows best," Rassbach added.
Eighteen states had backed Arkansas, saying the court should defer to the judgment of prison officials.
Judd Deere, spokesman for Arkansas Attorney General Leslie Rutledge, said, "We are disappointed that the U.S. Supreme Court reversed the decisions of the two lower federal courts that reviewed the Arkansas Department of Correction's grooming policy."
Justice Ruth Bader Ginsburg wrote a pointed concurring opinion that recalled the court's bitterly divided 2014 decision allowing for-profit companies to deny employees contraceptive insurance coverage based on company owners' religious beliefs.
"Unlike the exemption this court approved in Burwell v. Hobby Lobby Stores," Ginsburg said, joined by Justice Sonia Sotomayor, "accommodating (Holt's) religious belief in this case would not detrimentally affect others who do not share (his) belief."
The case is Holt v. Hobbs, U.S. Supreme Court, 13-6827.
