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The case now goes to a federal appeals court in Richmond, Virginia.
Trump has said a travel ban is needed to preserve US national security and keep out extremists.
His first effort, in January, banned travelers from seven majority-Muslim countries and all refugees but was blocked by a court in Washington state on the grounds that it violated the constitution's prohibition of religious discrimination.
That block was upheld on appeal, and the administration said it would revise the ban to better adhere to the law.
But the new ban has run into the same problems.
It aims to close US borders to nationals of Iran, Libya, Somalia, Sudan, Syria and Yemen for 90 days, and all refugees for at least 120 days. Iraq was on the original ban but removed in the revision.
The White House said the six countries were targeted because their screening and information capabilities could not meet US security requirements.
While the ban does not mention Muslims, the courts have accepted arguments that Trump's statements while he was running for president last year -- that he would open his White House term with a ban on Muslim arrivals -- effectively defined his approach.
Arguing the case in Hawaii, Acting Solicitor General Jeffrey Wall said of Trump's comments: "There is a difference between a president and a candidate."
"This order doesn't draw any religious distinction at all," he added.
White House spokesman Sean Spicer said Thursday the Trump administration would "vigorously defend" its travel ban, and would seek "clarification" before appealing the Hawaii court decision in the near future.
The American Civil Liberties Union had filed the lawsuit in Maryland on behalf of several refugee assistance groups and was optimistic about its chances in the appeals court.
"President Trump's Muslim ban has fared miserably in the courts, and for good reason -- it violates fundamental provisions of our constitution," said Omar Jadwat, director of the ACLU's Immigrants' Rights Project.
"We look forward to defending this careful and well-reasoned decision in the appeals court."
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Trump has said a travel ban is needed to preserve US national security and keep out extremists.
His first effort, in January, banned travelers from seven majority-Muslim countries and all refugees but was blocked by a court in Washington state on the grounds that it violated the constitution's prohibition of religious discrimination.
That block was upheld on appeal, and the administration said it would revise the ban to better adhere to the law.
But the new ban has run into the same problems.
It aims to close US borders to nationals of Iran, Libya, Somalia, Sudan, Syria and Yemen for 90 days, and all refugees for at least 120 days. Iraq was on the original ban but removed in the revision.
The White House said the six countries were targeted because their screening and information capabilities could not meet US security requirements.
While the ban does not mention Muslims, the courts have accepted arguments that Trump's statements while he was running for president last year -- that he would open his White House term with a ban on Muslim arrivals -- effectively defined his approach.
Arguing the case in Hawaii, Acting Solicitor General Jeffrey Wall said of Trump's comments: "There is a difference between a president and a candidate."
"This order doesn't draw any religious distinction at all," he added.
White House spokesman Sean Spicer said Thursday the Trump administration would "vigorously defend" its travel ban, and would seek "clarification" before appealing the Hawaii court decision in the near future.
The American Civil Liberties Union had filed the lawsuit in Maryland on behalf of several refugee assistance groups and was optimistic about its chances in the appeals court.
"President Trump's Muslim ban has fared miserably in the courts, and for good reason -- it violates fundamental provisions of our constitution," said Omar Jadwat, director of the ACLU's Immigrants' Rights Project.
"We look forward to defending this careful and well-reasoned decision in the appeals court."
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