The ruling by the conservative majority transformed the political landscape and the rules on how money can be spent in future presidential and congressional elections, which already have broken new spending records with each political cycle.
The justices overturned Supreme Court precedents from 2003 and 1990 that upheld federal and state limits on independent expenditures by corporate treasuries to support or oppose candidates.
The decision was a victory for a conservative advocacy group's challenge to the campaign finance law as part of its efforts to broadcast and promote a 2008 movie critical of then-presidential candidate Hillary Clinton. She later became President Barack Obama's secretary of state.
The justices appeared at a special Thursday session to summarize the ruling and issued a total of five separate opinions exceeding 175 pages.
Writing for the majority, Justice Anthony Kennedy said the limits violated constitutional free-speech rights. "We find no basis for the proposition that, in the context of political speech, the government may impose restrictions on certain disfavored speakers," he wrote.
The court's conservative majority, with the addition of Chief Justice John Roberts and Justice Samuel Alito, both Bush appointees, previously voted to limit or strike down parts of the law designed to regulate the role of money in politics and prevent corruption.
The court's four liberals, including its newest member, Justice Sonia Sotomayor, who was appointed by Obama, dissented.
In his sharply worded dissent, Justice John Paul Stevens wrote, "The court's ruling threatens to undermine the integrity of elected institutions across the nation."