The case involved stories written in 2001 by Times reporters Judith Miller and Philip Shenon that revealed the government's plans to freeze the assets of two Islamic charities, the Holy Land Foundation and the Global Relief Foundation.
In a 2-1 decision, the 2nd U.S. Circuit Court of Appeals said federal prosecutors can see the phone records of Shenon and Miller. Miller retired from the Times a year ago.
The Times wants Justice Ruth Bader Ginsburg to block temporarily the government from going through the records so that the newspaper can prepare a petition arguing why the justices should step into the case. Ginsburg asked the Justice Department for a response.
A federal judge had ruled that the records were off limits unless prosecutors could show they had exhausted all other means of finding out who spoke to the newspaper.
The appeals court said a grand jury investigation of the disclosures wasn't likely to go anywhere without help from the reporters or access to their records.
In papers filed with the Supreme Court, the Times said when confidential sources confirmed that the assets of two charities would be frozen, Shenon and Miller called the two organizations for comment.
The government, which is conducting a leak investigation to try to find out the reporters' sources, says those phone calls tipped off the charities of planned government raids. A federal judge who ruled in the newspaper's favor said there is no evidence in the record suggesting the reporters even knew of the government's plans to raid either charity.
In a separate matter, Miller spent 85 days in jail for defying court orders that she testify in the investigation into who in the Bush administration leaked the identity of covert CIA officer Valerie Plame.