The US Environmental Protection Agency (EPA) has lost some of its power to reduce greenhouse gas emissions.
The landmark ruling by the US Supreme Court represents a major setback to President Joe Biden's climate plans.
He called it a "devastating decision" but said it would not undermine his effort to tackle the climate crisis.
The case against the EPA was brought by West Virginia on behalf of 18 other mostly Republican-led states and some of the nation's largest coal companies.
They were challenging whether the agency has the power to regulate planet-warming emissions for state-wide power sectors or just individual power plants.
These 19 states were worried their power sectors would be regulated and they would be forced to move away from using coal, at a severe economic cost.
In a 6-3 ruling, the court sided with the conservative states and fossil-fuel companies, agreeing that Congress had not "intended to delegate... decision[s] of such economic and political significance".
Attorney General Eric Schmitt for Missouri - one of the 19 states - called it a "big victory... that pushes back on the Biden EPA's job-killing regulations".
The court hasn't completely prevented the EPA from making these regulations in the future - but says that Congress would have to clearly say it authorises this power. And Congress has previously rejected the EPA's proposed carbon limiting programmes.
Environmental groups will be deeply concerned by the outcome as historically the 19 states have made little progress on reducing their emissions - which is necessary to limit climate change.
The states made up 44% of the US emissions in 2018, and since 2000 have only achieved a 7% reduction in their emissions on average.
"Today's Supreme Court ruling undermines EPA's authority to protect people from climate pollution at a time when all evidence shows we must take action with great urgency," said Vickie Patton, general counsel for Environmental Defense Fund (EDF).