The ruling is a major victory for the National Rifle Associaiton, which argued the law was unconstitutional.
Justices said the right to bear arms for self-defense is as important outside the home as inside.
The court gave Illinois lawmakers six months to put its own version of the law in place.
Illinois is the only state in the nation not to have some form of conceal carry.
A spokesperson for Attorney General Lisa Madigan says the office is reviewing what legal steps can be taken. Gun control advocates are pushing for an appeal.