In a six to three ruling, the high court upheld key portions of a 50-year-old Virginia law banning cross carried out with "the intent of intimidating."
The court was more closely divided on the narrower issue of whether the cross burning law violates First Amendment protections, ruling five to four that the ban does not violate the constitutional guarantee of free speech. A lower court had ruled that the law infringed on free speech rights.
"The protections the First Amendment affords speech and expressive conduct are not absolute," Justice Sandra Day O'Connor wrote in delivering the majority opinion of the court.
O'Connor called the act of burning a cross in the United States "inextricably intertwined with the history of the Ku Klux Klan, which, following its formation in 1866, imposed a reign of terror throughout the South, whipping, threatening and murdering blacks, southern whites who disagreed with the Klan, and 'carpetbagger' northern whites."
"While cross-burning does not inevitably convey a message of intimidation, often the cross-burner intends that the recipients of the message fear for their lives," O'Connor said. "And when a cross-burning is used to intimidate, few if any messages are more powerful."
O'Connor was joined by Chief Justice William Rehnquist and Justices John Paul Stevens, Antonin Scalia and Stephen Breyer.
Justices Anthony Kennedy, David Souter and Ruth Bader Ginsburg dissented on free speech grounds, citing a 1992 decision by the high court that found a Minneapolis law that banned racially offensive displays of certain symbols, such as swastikas, unconstitutional discrimination against speech.
Four of the justices also wrote that they would find unconstitutional a part of the Virginia law that specifies that any cross burning is evidence in itself of the intent to intimidate.
Justice Clarence Thomas, the only African-American member of the Court, filed a separate opinion in which he said he would uphold the law in its entirety, disagreeing with the majority's decision to weigh the ban on the grounds of free speech, saying that the law prohibited conduct and not expression.
"Just as one cannot burn down someone's house to make a political point and then seek refuge in the First Amendment, those who hate cannot terrorize and intimidate to make their point," he wrote.
Echoing Justice O'Connor's majority opinion, Thomas pointed out that the connection between cross burning and violence is widely recognized, calling the Klan a "terrorist organization."
"For those not easily frightened, cross-burning has been followed by more extreme measures, such as beatings and murder," Thomas wrote.
"In our culture, cross-burning has almost invariably meant lawlessness and understandably instills in its victims well-grounded fear of physical violence," he said.
The Court's ruling came in response to a challenge to the Virginia law brought by three men convicted in two 1998 cross-burning incidents. The Court consolidated their appeals into one case, Virginia v. Black.
In one of the incidents, two white teenagers tried to set fire to a cross in the yard of an interracial couple who lived in the Virginia Beach area. The other involved a cross burning on private property with the owner's permission as part of a Klan rally in southern Virginia.