Katherine, 82, had the custody of Paris, Prince Michael and Blanket but the judge suspended that arrangement because she left the family home, reported CNN online.
"We have reason to believe that Mrs Jackson has been held against her will," Katherine's attorney Sandra Ribera told Los Angeles County Superior Court Judge Mitchell Beckloff at a hearing yesterday.
However, another attorney for Katherine, Perry Sanders, said he had been told by late singer's brother Randy that his mother was on her way back to California.
Sanders, who later spoke to his client as she was being driven home, said he will file a petition to restore her as custodian as soon as he meets with her.
"Katherine was unaware of the controversy swirling around her family for the past week," Sanders said.
Beckloff suspended Katherine as custodian for the children because she may be "prevented from acting as a guardian because of the acts of third parties."
He also ordered "that the children not be removed from California without a court order, by any person" following an attempt by Randy, Jermaine and Janet Jackson to take the children to Arizona where Katherine was being kept by them.
The judge also ordered that Diana Ross, whom Michael named as back-up guardian in his will, and Debbie Rowe, the biological mother of the two oldest children, be given notice.
The order will be reconsidered at a hearing next month, and the judge left open the possibility that custody could be returned sooner if Katherine returns home.
Katherine's disappearance had worried her grandchildren with Paris posting a series of messages on Twitter.
Jackson's siblings are at war with his estate over his fortune. They reportedly want Katherine to come on board to challenge Michael's will and get the executors removed. Only Katherine and Michael's three children are named in the will.
