San Juan County and the state of Utah sued the Park Service, arguing the government could not close the streambed to four-wheel-drive vehicles because it was a county and state highway.
The county says it maintained and improved the road for the public for decades before the park was established.
The state also claims the road was used from the 1920s to run cattle and haul supplies to established cowboy camps and had been a road for visitors and uranium prospectors since at least 1954.
The Associated Press
County attorney Shawn Welch told the court there was no official notice that the access route would be closed.
"Roadmaps clearly show it was used as a road," Welch said.
A trial court ruled that the few travelers who ventured up the stream before Canyonlands became a national park in 1964 did not convert the creek into a highway under federal law.
The Southern Utah Wilderness Alliance said the debate involves a repealed law passed by Congress in 1866 as a way to promote orderly settlement and development of the West and to recognize existing highways. The law, commonly known as "R.S. 2477" was repealed in 1976, but it grandfathered in valid existing access rights.
The alliance and the nonprofit environmental law firm Earthjustice joined the lawsuit asking the appeals court to reject Utah's arguments. Grand Canyon Trust, The Wilderness Society, Sierra Club and the National Parks Conservation Association also joined the appeal.
Earthjustice attorney Ted Zukoski said in a statement the area is a rare desert gem with a plethora of archaeological sites, including ancient cliff dwellings.
Ecologists say other areas at risk include the Grand Staircase Escalante National Monument, Dinosaur National Monument and the Glen Canyon National Recreation Area, after Utah filed more than 20 lawsuits in May that include trails, cow paths, streambeds and abandoned prospector tracks.