The National Security Agency's collection and storage of US landline calling records (times, dates and numbers but not content of the calls) was the most controversial program among many disclosed in 2013 by former NSA systems administrator Edward Snowden.
Some NSA officials opposed the program, and independent evaluations have found it of limited value as a counterterrorism tool.
Snowden remains exiled in Russia.
"In light of the asserted national security interests at stake, we deem it prudent to pause to allow an opportunity for debate in Congress that may (or may not) profoundly alter the legal landscape," said the opinion written by Circuit Judge Gerald Lynch.
Also Read
"The statutes to which the government points have never been interpreted to authorize anything approaching the breadth of the sweeping surveillance at issue here," the court said.
US Attorney General Loretta Lynch said the government is reviewing the court's decision. She added that the June 1 expiration of the Patriot Act provisions provides opportunities to reauthorize the program "in a way that does preserve its efficacy and protect privacy."
The court's ruling sharpens the focus on the ongoing congressional debate surrounding the program.