Two inmates sued, claiming facilities are so overcrowded that they cannot get the medical and psychiatric care they need.
A three-judge panel agreed, saying overcrowding deprived inmates of the healthcare they were entitled to under the U.S. Constitution and ordered prison officials to reduce its inmate population by some 40,000 to 50,000.
But the Schwarzenegger administration appealed and the case heads to the U.S. Supreme Court Tuesday.
At stake is whether tens of thousands of inmates should be released.
The governor's lawyers will argue the courts have no business telling the state what to do, and freeing a quarter of the prison population could represent a danger to millions of residents.
The state will also argue it has made progress in relieving the overcrowded conditions by sending thousands of inmates to out-of-state prisons and relaxing parole terms that certain parolees wouldn't go back to prison for every violation.