US District Judge Derrick Watson cited “questionable evidence” in the government’s argument that the ban was a matter of national security, Joinfo.com reports with reference to the BBC.
President Trump described the ruling as “unprecedented judicial overreach”.
The order would have placed a 90-day ban on people from six mainly Muslim nations and a 120-day ban on refugees.
Mr Trump insists the move is to stop terrorists from entering the US but critics say it is discriminatory.
An earlier version of the order, issued in late January, sparked confusion and protests, and was blocked by a judge in Seattle.
Speaking at a rally in Nashville, Tennessee on Wednesday evening, Mr Trump said the ruling in Hawaii made the US “look weak”. He said he would take the case “as far as it needs to go” including to the Supreme Court, adding: “We’re going to win.”
Hawaii is one of several US states trying to stop the ban.
Lawyers had argued that the ban would violate the US constitution by discriminating against people on the grounds of their national origin.
The state also said the ban would harm tourism and the ability to recruit foreign students and workers.