"Today, we can go back to California and say to our own children, all four of our boys, 'Your family is just as good as everybody else's family,'" said plaintiff Kris Perry.
Perry and other plaintiffs celebrated in front of a huge crowd in West Hollywood Wednesday evening.
"Today, the words emblazoned across the Supreme Court ring true: 'equal justice under law,'" said plaintiff Paul Katami.
The 5-4 vote leaves in place the initial trial court declaration that the ban is unconstitutional, but the court avoided making a sweeping decision on the constitutionality of gay marriage restrictions.
Gov. Jerry Brown directed the California Department of Public Health to start issuing marriage licenses to gay couples as soon as a federal appeals court lifts its stay on a lower court ruling in the case. The federal appeals court said it will wait at least 25 days before making a decision on whether gay marriages can resume in California.
The 9th U.S. Circuit Court of Appeals said Prop. 8 backers have that long to ask the Supreme Court to rehear the case, and if they do ask for a rehearing, the court said it may continue to bar gay marriages even beyond the 25 days.
"No change in the issuance of marriage licenses can occur until further notice," Los Angeles County clerk said in a statement. "Upon direction, the Los Angeles County Registrar-Recorder/County Clerk will begin issuing licenses and performing ceremonies for same-sex couples."
Prop 8 was approved by California voters in 2008, defining marriage as between one man and one woman. Because California officials declined to defend the law, lawyers for the original sponsors of the initiative stepped in.
"While I have been quiet for the last 5 years, for this proposition to take place in our legal system, I'm here today on behalf of the 7 million voters in the state of California to express our disappointment, We believe that every vote should count," said Jennifer Kerns, spokesperson for Prop. 8.
Chief Justice John Roberts read the court's opinion, dismissing the case on the basis that the "petitioners did not have standing to appeal the District Court's order."
Opponents of same sex marriage who argued in favor of Prop 8 interpreted the ruling to mean that the ban approved in 2008 should remain in place.
"We do expect and believe the officials of the state of California will continue to honor Proposition 8 and enforce it as the law of the state of California," said Austin Nimocks, a supporter of Prop 8.
Los Angeles Mayor Antonio Villaraigosa said the court's decision is a "momentous step on the path to full equality."
"We celebrate a victory for love and fairness, a victory for same-sex couples who only want to follow their hearts and marry the person they love. As we move closer to a more perfect union, we will continue to make our case: if we truly believe in family values, we should value all families," said Villaraigosa.
Also Wednesday, the Supreme Court struck down a key provision of the Defense of Marriage Act that denied benefits to legally married gay couples. The ruling means that legally married same-sex couples should get the same federal benefits as heterosexual couples.
The Associated Press contributed to this report.