Slimane Bouhafs had been sentenced to five years in prison and fined £900 for what Algerian authorities claim was insulting Islam and the Prophet via social media.
It was after Mr Bouhafs, who converted to Christianity in 1997, posted on Facebook saying 'Jesus overcomes the lies of Islam' with a picture of a jihadist killing a Christian.
On appeal his sentence has now been reduced to three years in prison and the fine has been dropped.
The anti-persecution charity Open Doors has previously said that comments like the one Slimane Bouhafs put on social media would not normally be prosecuted, and it's possible he was targeted because he is also the member of a separatist group which is campaigning for a certain region of Algeria to have independence from the rest.
The Algerian League for Human Rights, working on behalf of Bouhafs and the Protestant Church of Algeria, called the decision to keep Bouhafs in jail "amazing and offensive" and said it will now take his case to the Supreme Court.
Its vice-president Said Salhi added: "Although the sentence has been reduced, LADDH considers imprisonment for this accusation a serious precedent and this is inconsistent with the Constitution and the universal declaration of human rights.
Algeria is an overwhelmingly Muslim country. Out of 40.4 million people, around 39,000 are Christians.
