The cycle ride has been taking place in London since 1994
Hundreds of cyclists who descend on central London for impromptu mass rides do not have to give advance notice to the police, Law Lords have ruled.
Every month cyclists gather on the South Bank and ride through the city to celebrate safe cycling.
A Court of Appeal ruling had said officers should be notified.
But the Lords allowed an appeal against the decision by Des Kay, a participant in the Critical Mass ride. He said he was "thrilled" by the landmark win.
Earlier cyclists who took part in the rides had been handed written notices by the police.
They said the event was unlawful as it is governed by section 11 of the Public Order Act 1986 and organisers needed to notify them about the date, route and participants' names and addresses.
But the House of Lords said that as the event had no specified leader or set route and proceeded on a "follow my leader" basis, it was not subject to the Act.
Mr Kay, an environmental educator and performing artist, said: "This was a very important case for people like me who have cycled with Critical Mass for many years.
"More importantly, I hope that it will encourage other cyclists to join the monthly rides."
The Metropolitan Police argued that the cyclists followed different routes every time so police needed to be notified to avoid disorder and traffic disruption.
But Lord Chief Justice, Lord Phillips of Worth Matravers, said evidence showed officers were usually able to police the event.
Allowing the appeal he said anyone proposing similar processions with no predetermined route for the first time elsewhere in the country would be acting within the law.
Saying he was unable to give the law "this draconian effect" Lord Phillips said: "It is inconceivable that Parliament could have intended, by a sidewind, to outlaw events such as Critical Mass."
Friends of the Earth Rights and Justice Centre, which represented Mr Kay, said the ruling was "an important victory for the right to peaceful protest".
Impromptu Critical Mass rides take place in more than 400 cities worldwide.
The monthly ride in London has been taking place on the last Friday of every month since April 1994.
The legal action was a result of a leaflet handed out by police at a ride in September 2005.