The case involved Joseph Steffan, a midshipman who resigned from the US naval academy in 1987 soon after he declared he was homosexual. There was no evidence that he engaged in homosexual activity. The court ruled that the military regulations which forced Mr Steffan to resign were unconstitutional.
'America's hallmark has been to judge people by what they do, and not what they are,' wrote Chief Judge Abner Mikva. 'It is fundamentally unjst to abort a most promising military career solely because of a truthful confession of a sexual preference different from that of the majority.'
By ordering the navy to reinstate Mr Steffan and commission him as an officer, the decision by the court will reopen the debate on homosexuals in the military. It is a serious blow to the Pentagon which, for over 50 years, tried to detect homosexuals and expel them from the military. Earlier this year it was able to block President Clinton's attempt to end discrimination by the military against homsexuals.
In July, the Joint Chiefs of Staff agreed to a compromise: a homosexual who did not reveal his or her sexual inclinations would not be persecuted. The investigative process, on which armed forces spent some dollars 500m ( pounds 335m) in the 1980s, would be dropped. But known homosexuals would still be forced out of the military, even if they did not engage in homosexual conduct.
At the time he resigned from the navy, Mr Steffan was in the top 10 per cent of his class and was about to start duties on a nuclear submarine. After admitting he was homosexual his performance grade was reduced, in a day, from an A minus to an F. A review panel recommended he be discharged.
The Supreme Court may end up deciding the issue, but the Appeal Court judgment shows how difficult it will be for the Pentagon to sustain its partial ban. It says that by dismissing Mr Steffan purely for his 'inclinations and fantasies' the Pentagon was seeking to control the minds of members of the military.
Between 1989 and 1993, 3,500 servicemen were discharged for homosexuality.Reuse content