The Russian Supreme Court overturned a lower court decision banning the National Bolshevik Party, known for outrageous acts of political protest.
"We are delighted," party leader Eduard Limonov told The Associated Press. "There is hope for this country's future."
A spokeswoman for Prosecutor General's Office said it would appeal the decision, which overturns a June ruling by a Moscow court.
Prosecutors had argued the group violated registration procedures and was involved in extremist activities.
The party is known for demonstrations and pranks, such as seizing government buildings, hanging anti-President Vladimir Putin banners from hotel windows and pouring juice on the coach of the national soccer team. Limonov's ultranationalist writings have also attracted wide attention.
The party is registered as a regional group, meaning it cannot run for parliamentary elections. It has a total of about 17,000 representatives across the country, Limonov said.
The organization says it strives for social and national justice and adheres to socialist economic ideas. It also promotes nationalist ideas, such as protecting Russian-speakers in ex-Soviet republics, where the group complains they face severe discrimination.
Putin made his first public comment on the subject of the recent decision of US President Donald Trump to recognise Jerusalem as the capital of Israel