An appeal is being mounted by the Catholic Archdiocese of Washington to the US Court of Appeals after a federal court ruling on Sunday.
The federal court sided with the Washington Metropolitan Area Transit Authority (WMATA) which refused to carry the advert on its 1,500 buses because it promoted a religious message.
Secretary of Communications for the Archdiocese, Ed McFadden was quoted by News4 as saying: "In a society concerned more with what's under the tree, and where the birth of Jesus is treated as an intrusive element to the season, we simply want to share the real Christmas story, the full joy of Christmas, with our neighbours and share the Christmas spirit with those in need."
The image, entitled 'Find the Perfect Gift', portrayed the bright star which led the Magi from the East to the baby Jesus in Bethlehem, and shepherds.
WMATA said: "In 2015, WMATA changed its advertising space to a non-public and prohibits issue-oriented advertising, including political, religious and advocacy advertising.
"The ad in question was declined because it is prohibited by WMATA's current advertising guidelines."