The most deadly outbreak of the disease on record has killed nearly 5,000 people, all but a handful of them in Liberia, Guinea and Sierra Leone.
Maine Governor Paul LePage said that while he was disappointed by the order from Charles LaVerdiere, the chief judge of Maine District Court, the New England state would abide by it.
Hickox, 33, said she was pleased with the ruling and said people need to "overcome the fear."
On Thursday, the nurse defied the state's quarantine order and went on a bike ride with her boyfriend. That prompted the governor to try to enforce her quarantine at home through the courts.
In Friday's order, LaVerdiere said, "the court is fully aware of the misconceptions, misinformation, bad science and bad information being spread from shore to shore in our country with respect to Ebola.
"The court is fully aware that people are acting out of fear and that this fear is not entirely rational. However, whether that fear is rational or not, it is present and it is real," the judge added, saying Hickox should follow three restrictions even though she is "not infectious."
After a hearing held by telephone, LaVerdiere decided that Hickox must continue direct monitoring of her health, coordinate travel plans with health officials and report any symptoms.
Speaking to reporters alongside boyfriend Ted Wilbur outside her two-story clapboard house in the small town of Fort Kent along the Canadian border, Hickox said she would comply.
"It's just a good day," Hickox said. "I am taking things minute by minute. Tonight, I am going to try to convince Ted to make me my favorite Japanese meal. And I think we're going to watch scary movies since it's Halloween."
Hickox tested negative for Ebola after returning from working for Doctors Without Borders in Sierra Leone. She also objected when the state of New Jersey put her into isolation when she arrived at Newark airport.
She said he hoped to be able to return for more work in West Africa. "I love working overseas. It's been a large part of my life since 2006," Hickox said.
"I know that Ebola is a scary disease. I have seen it face-to-face and I know that we are nowhere near winning this battle," she added.
Hickox said she has no candy to give to children who may be going house to house for the spooky holiday "because we haven't been shopping for a while" but finished her appearance by wishing reporters, "Happy Halloween."
She had given Maine a deadline of Thursday to lift an order that she remain at home until Nov. 10. The state did not lift the 21-day quarantine. Twenty-one days is the maximum incubation period for Ebola.
In an interview, the nurse's attorney, Norman Siegel, called the decision "a terrific win for Kaci. It validates what she’s been saying."
In a statement, LePage said, "As governor, I have done everything I can to protect the health and safety of Mainers. The judge has eased restrictions with this ruling and I believe it is unfortunate. However, the state will abide by law."
Following the ruling, state troopers who had been stationed outside Hickox's home departed.
The Republican governor has been in a tough, three-way re-election battle that culminates in Tuesday's elections. Nationwide, Ebola has become as much of a political issue as a public health question, with some politicians calling for a ban on travel from the three West African countries.
Medical professionals say Ebola is difficult to catch and is spread through direct contact with bodily fluids from an infected person and is not transmitted by asymptomatic people. Ebola is not airborne.
Public health experts, the United Nations, federal officials and even President Barack Obama have expressed concern that state quarantines for returning doctors and nurses could discourage potential medical volunteers from fighting the outbreak at its source in West Africa.
U.S. public concern about the virus is high even though only one person in the country is currently being treated for it, a New York doctor, Craig Spencer, who cared for patients in West Africa.
In New York on Friday, U.S. Ambassador to the United Nations Samantha Power defended federal guidelines for monitoring healthcare workers returning from the three Ebola-stricken countries.
Power spoke at a Reuters Newsmaker event hours after returning from a four-day trip to Liberia, Guinea and Sierra Leone. She said she believed current federal guidelines for returning healthcare workers balanced "the need to respond to the fears that this has generated" in the United States with the known science on the disease.