Lawyers for Edwards argued before U.S. District Court Judge Catherine C. Eagles that prosecutors failed to prove Edwards intentionally violated the law.
After two-and-a-half hours of arguments from prosecutors and the defense, the judge ruled immediately from the bench that there was enough evidence to let jurors decide.
Motions to dismiss are routine in criminal trials, but rarely granted. The decision means Edwards' lawyers will begin calling witnesses Monday.
Edwards has pleaded not guilty to six criminal counts related to campaign finance violations. He is accused of masterminding a scheme to use nearly $1 million in secret payments from two wealthy donors to help hide his pregnant mistress as he sought the Democratic presidential nomination in 2008. He faces up to 30 years in prison if convicted on all counts.
After 14 days of testimony and evidence presented by prosecutors, legal observers in the North Carolina courtroom said the government's case was weak.
"They have established their case enough to get to a jury, but it has holes in it," said Kieran J. Shanahan, a Raleigh defense lawyer and former federal prosecutor. "He is not charged with being a liar and he is not charged with having a baby out of wedlock. He is charged with breaking campaign finance laws."
To prove guilt, prosecutors must show that Edwards not only knew about the money used in the cover-up orchestrated by two members of his campaign, which he denies, but also that the former trial lawyer knew he was violating the law.
Prosecutors rested their case Thursday by playing a tape of a 2008 national television interview in which the Democrat repeatedly lied about his extramarital affair with the woman, Rielle Hunter, and denied fathering her baby. Earlier testimony from a parade of former aides and advisors also showed an unappealing side of Edwards, casting him as a liar and lousy husband.
"It is rare the jury gets to see the defendant talking about the main issues of a case in a televised videotape, especially with the defendant watching himself talking about the issues in the videotape," said Steven Friedland, a former prosecutor and professor as Elon University School of Law. "The defense must somehow counteract that lasting impression."
A key question is whether Edwards will take the stand in his own defense.
Before winning a U.S. Senate seat in 1998, Edwards made a fortune as a personal injury lawyer renowned for his ability to sway jurors. However, in doing so Edwards would also expose himself to what would likely be a withering cross-examination about his many past lies and personal failings.
The defense could also call Hunter to the stand, which prosecutors declined to do. She could potentially echo Edwards' position that he didn't have direct knowledge of the secret effort to care for her and keep her out of the public eye.
However, Friedland said he'd be surprised to see the mistress take the stand.
"She will simply call more attention to the lies surrounding her affair and pregnancy," he said.