The controversial decision bars Jeffrey Kendall from taking his three children to church or enrolling them in Sunday school, following the objections of his former wife.
Mr Kendall is a Christian. The children's mother, Barbara Zeitler, with whom they live, is Jewish.
"Promoting the best interests of the children is an interest sufficiently compelling to impose a burden on the (father's) right to practice religion and his parental rights to determine the religious upbringing of his children, " Massachusetts Supreme Judicial Court Judge Neil Lynch said.
Mr Kendall was ordered not to "share his religious beliefs with the children if they caused them significant emotional distress or worry about their mother or about themselves."
He could hang pictures of Jesus Christ on the wall, for example, but could not take the children to church where they would be told that non-Christians were "destined to burn in hell," the court ruled.
Michael Greco, the attorney acting for the father, said that the Government had no business meddling in personal religious decisions.
"A court cannot - shall not - establish a religion for someone, and here the court effectively has established a religion for these three children," Mr Greco said. "That's the court intruding where it shouldn't be intruding. "
A 1979 Pennsylvania ruling prohibited a Jehovah's Witness father from taking his Catholic child proselytising door-to-door. A 1990 Nebraska ruling also banned exposing a child to the religion of one of his divorced parents because it created stress.