Members of the 9th U.S. Circuit Court of Appeals say the 22-year sentence for Ahmed Ressam, who was "too lenient."
Ressam was arrested at a ferry terminal in Port Angeles, Washington after crossing over from British Columbia, Canada. Investigators found explosives in the trunk of his rented car.
The three-member federal appeals court ordered that Ressam be re-sentenced by another federal judge.
The appeals court calls the current sentence "both procedurally and substantively unreasonable."
The Royal Canadian Mounted Police says it had Ressam under surveillance for two years, and he was a member of al-Qaeda.
The appeals court panel says Ressam deserved a much longer prison term because he reneged on a deal to cooperate with terrorism investigators around the world.
Ressam was tried and convicted in Los Angeles after his case was moved out of Seattle due to pre-trial publicity.
AP and CNS contributed to this report.