The 10th U.S. Circuit Court of Appeals in Denver heard oral arguments Wednesday in Wyoming's lawsuit challenging the rule.
The U.S. Department of Agriculture — the parent agency of the National Forest Service — and environmental groups argue the rule is legal.
The two sides also made arguments on whether the rule-making process followed federal laws.
The rule affects at least 40 million acres of federal land nationwide.
The court did not indicate when it would decide the case.