The court ordered Russia to pay damages to the 45 Americans who filed the case, who had hoped to adopt 27 children between 2010 and 2012.
Many of the children had serious medical problems, including Down's Syndrome or developmental disorders, requiring specialised treatment.
Russia halted the procedures with legislation in January 2013 that prohibited Americans from adopting Russian children, solely based on their nationality.
The law was in response to US sanctions on officials deemed responsible for the death in prison of Russian lawyer Sergei Magnitsky in 2009. Magnitsky had been arrested after pointing out a fraud scam by high-placed officials.
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But in a unanimous decision, the judges at the Strasbourg-based rights court said Russia had violated statutes of the European Convention on Human Rights against discrimination and protecting the respect of family life.
It ordered Moscow to pay 3,000 euros (USD 3,200) in damages to the American couples and individuals in the case.
Russia's justice ministry said it would appeal the ruling, saying its restrictions on adoptions by Americans were in accordance with international rules and its constitution.
In its ruling, the court said the ban was disproportionate to the government's stated aims, "given that it had been retroactive, indiscriminate, and was applied irrespective of the status of proceedings or the individual circumstances".
The court noted a 2012 accord between the two countries that provides guarantees against mistreatment and that allows international adoptions only when placing a child with a Russian family is not possible.