WASHINGTON, June 26 -- In a sweeping endorsement of free speech on the Internet, the Supreme Court today declared unconstitutional a Federal law making it a crime to send or display indecent material on line in a way available to minors.

The decision, unanimous in most respects, marked the Court's first effort to extend the principles of the First Amendment into cyberspace and to confront the nature of a new, and -- to most of the Justices -- an unfamiliar medium.

The result left the coalition of Internet users, computer industry groups and civil liberties organizations that had challenged the Communications Decency Act exultant. The forceful opinion for the Court by Justice John Paul Stevens held that speech on the Internet is entitled to the highest level of First Amendment protection, similar to the protection the Court gives to books and newspapers. That stands in contrast to the more limited First Amendment rights accorded to speech on broadcast and cable television, where the court has tolerated a wide array of Government regulation.

''Content on the Internet is as diverse as human thought,'' Justice Stevens said in a quotation from a special three-judge Federal District Court in Philadelphia, which struck down the Communications Decency Act a year ago in a decision the Supreme Court affirmed today.

The Internet is a rapidly expanding global computer network, which allows as many as 60 million people to communicate on line and connect with information and entertainment sources around the world. A large majority of its users live in the United States.

The decision makes it unlikely that any Government-imposed restriction on Internet content would be upheld as long as the material has some intrinsic constitutional value. Obscenity, which is outside the protection of the First Amendment, is also covered by the Communications Decency Act, and the Court left that provision intact today without even analyzing it.

The indecent material at issue today was not precisely defined by the 1996 law -- one of its serious vulnerabilities, as the Court saw it -- but was referred to in one section of the statute as ''patently offensive'' descriptions or images of ''sexual or excretory activities.''

Justice Stevens said that the Court regarded the law's goal of protecting children from indecent material as legitimate and important, but concluded that the ''wholly unprecedented'' breadth of the law threatened to suppress far too much speech among adults and even between parents and children. ''The interest in encouraging freedom of expression in a democratic society outweighs any theoretical but unproven benefit of censorship,'' Justice Stevens wrote.

He noted that people could not ''confidently assume'' that discussions of birth control, homosexuality, or prison rape, or even the transmission of ''the card catalogue of the Carnegie Library,'' would not violate the law and place computer network users at risk of severe criminal penalties. Violations of the Communications Decency Act, which never went into effect because of a stay issued by the lower court, carried penalties of two years in prison and a $250,000 fine. ''The severity of criminal sanctions may well cause speakers to remain silent rather than communicate even arguably unlawful words, ideas, and images,'' Justice Stevens said.

The law made it a crime to use a computer to transmit indecent material to someone under 18 years old or to display such material ''in a manner available'' to a person under 18. Justice Stevens said that given the nature of the Internet, there was no way someone transmitting indecent material could be sure that a minor would not see it. He noted that most uses of the Internet, like chat rooms, newsgroups, and the World Wide Web, ''are open to all comers.''

Nor, Justice Stevens said, could people rely on a defense provided by the law for those who take ''good faith, reasonable, effective and appropriate actions'' to restrict access by minors. No current technology satisfied those demands, he said.

The opinion, Reno v. American Civil Liberties Union, No. 96-511, was signed by Justices Antonin Scalia, Anthony M. Kennedy, David H. Souter, Clarence Thomas, Ruth Bader Ginsburg, and Stephen G. Breyer.

In a separate opinion by Justice Sandra Day O'Connor, she and Chief Justice William H. Rehnquist, who signed her opinion, subscribed to much of the Court's approach. They said the law could be constitutionally applied, but only in the very limited circumstance of deliberate transmission of indecent material ''where the party initiating the communication knows that all of the recipients are minors.'' If an adult might be among the recipients, the speech cannot constitutionally be suppressed, Justice O'Connor said.

Justice O'Connor said that on the surface, the Communications Decency Act was analogous to a zoning regulation, similar to the ''adult zones'' for bookstores and X-rated movie theaters the Court has upheld in a series of decisions. But the analogy was inexact, she said, because there is no way in cyberspace to make sure that minors can be screened out while still allowing adults to have access to the regulated speech.

Justice O'Connor said the law was clearly unconstitutional because it was ''akin to a law that makes it a crime for a bookstore owner to sell pornographic magazines to anyone once a minor enters his store.''

The Communications Decency Act was a last-minute Senate amendment to another bill, the Telecommunications Act of 1996. It was adopted without hearings and amid substantial doubts about its constitutionality. For that reason, its sponsors agreed to add a provision guaranteeing quick Supreme Court review after a hearing by a single three-judge court, a shortcut through the normal appellate process.

President Clinton signed the bill and Administration lawyers defended the law vigorously. At the same time, White House officials worked on a substitute Internet policy in the event the law was overturned, as some in the Administration hoped it would be.

The law was challenged by two main coalitions of plaintiffs, representing a wide spectrum of the Internet community. The United States Chamber of Commerce entered the case at the Supreme Court stage to argue that the law presented a threat to the country's ability to compete globally in an age of new communications, an argument that very likely got the attention of the free-market conservatives, including Justices Thomas and Scalia, who joined Justice Stevens's opinion.

The trial before the court in Philadelphia produced opinions by the three judges, Dolores K. Sloviter, Ronald L. Buckwalter and Stewart Dalzell, totaling 147 pages with 123 separate factual findings. The Court today relied heavily on these findings, including Justice Stevens's observation that the Internet was not as ''pervasive'' a medium as television or radio -- where the Court has permitted greater Government regulation -- because computer users have to actively search for indecent material and ''seldom encounter such content accidentally.''

Christopher A. Hansen, a lawyer for the American Civil Liberties Union, which organized one of the plaintiff groups, said today that in establishing the highest level of First Amendment protection, the Court's decision ''was more about speech than about technology.'' That made the decision important for all future Internet cases even as the technology may change, Mr. Hansen said.

In his opinion, Justice Stevens was critical of several aspects of the Government's defense of the law, but singled out one in particular. That was the argument that unless the law was upheld, development of the Internet would be stifled by parents' fears about having on-line access if they could not shield their children from indecent material.

''We find this argument singularly unpersuasive,'' Justice Stevens said, adding that ''the dramatic expansion of this new marketplace of ideas contradicts the factual basis of this contention'' given the ''phenomenal'' growth of the Internet. ''As a matter of constitutional tradition,'' he said, ''in the absence of evidence to the contrary, we presume that governmental regulation of the content of speech is more likely to interfere with the free exchange of ideas than to encourage it.''