It was just 18 months ago that U.S. scientists studying embryonic stem cells thought their nearly decade-long battle for federal funding was finally won. President Obama had signed an executive order ending a restrictive policy enacted in 2001 by President Bush. That policy had blocked federal funds from being used to study most human embryonic stem cells. But a surprise ruling by a lower court last week left the stem-cell community stunned. A federal judge issued an injunction, blocking federal funding for any research involving embryonic stem cells.

Researchers say the decision--even if it is later reversed--will have a damaging effect on the field, stunting promising medical research that was just building momentum. All grants under review at the nation's largest funding agency, the National Institutes of Health (NIH), that involve human embryonic stem cells have been put on hold while the NIH and other government agencies try to get the injunction reversed.

"Without federal grant dollars, the science will slow to a crawl, again," says George Daley, director of the Stem Cell Transplantation Program at Children's Hospital Boston. "We have seen an enormous outpouring of interest over the last year, with between 200 to 300 grants approved for use of embryonic stem cells. Every one of those grants and labs is now enjoined from using federal dollars. They will either have to stop doing work altogether or try to cobble together private funds, which are in short supply in this economy."

At the heart of scientists' disappointment is the delay the ruling will create in developing new therapies. "Patients have been waiting nearly 10 years to use the power of American science to unleash new treatments for disease," says Doug Melton, codirector of the Harvard Stem Cell Institute. "I have heard from many who are deeply disappointed, howling, 'How could this happen?' "

Embryonic stem cells, first derived from human embryos in 1998, have captured intense interest from both scientists and the general public for their ability to develop into any cell type in the body. Researchers ultimately aim to generate replacement tissue for cells lost or damaged to disease or injury. In the nearer term, scientists are using them to study the molecular mechanisms of disease, as well as to screen experimental drugs.

However, the cells have also been the subject of controversy; the lines of embryonic stem cells that scientists use are generated from excess embryos donated from fertility clinics. While these embryos would have ultimately been discarded, opponents object to any research that requires the destruction of human embryos. In 2001, President Bush struck a compromise, permitting researchers to use federal funds to study only a limited set of embryonic stem-cell lines already in existence. Those who wanted to create new lines or study them had to garner state or private money, in some cases setting up duplicate labs to carry out federally funded and privately funded projects.

Obama's executive order last year lifted the restrictions on federal funding. But a largely under-the-radar lawsuit brought by two scientists studying adult stem cells has made things even worse than the earlier Bush policy. Judge Royce Lamberth of the Federal District Court for the District of Columbia prohibited all embryonic stem-cell research from receiving federal funding.