"We encourage all participating parties to do their utmost to ensure that this matter now draws to a close in a manner that fully addresses the issues of due process and fundamental fairness raised by the events of long ago," the court's opinion stated.
While a blow to Polanski's efforts to have the case dismissed and win his freedom from Swiss authorities, the ruling cast serious doubt on the handling of the director's case by a now-dead judge.
Attorneys for the fugitive director argued earlier this month that misconduct in the case was grounds for dismissal of a charge of having unlawful sex with a minor. They also contended Polanski didn't need to be present to argue for dismissal.
The court disagreed but said a more thorough examination of the case should occur at the lower court level.
"The passage of more time before this case's final resolution will further hamper the search for truth and the delivery of any appropriate relief, and it will also prolong the agony that the lack of finality in this matter continues to cause Samantha Geimer," the opinion states.
Polanski fled the United States in 1978 on the eve of sentencing; he had pleaded guilty to one count of unlawful sexual contact with Geimer. Her attorney argued she had the right to ask that the case be dismissed and urged the court to do so.
Polanski was accused of plying the teen with champagne and part of a Quaalude pill, then raping her during a modeling shoot at Jack Nicholson's house in 1977. Polanski was initially indicted on six felony counts, including rape by use of drugs, child molesting and sodomy. He later pleaded guilty to one count of unlawful sexual intercourse in a plea bargain.
The opinion was written by Associate Justice Laurie Zelon, who questioned a prosecutor during oral arguments about why the office had not investigated recent allegations of misconduct by a judge and prosecutor during Polanski's 1977 court proceedings.
"Fundamental fairness and justice in our criminal justice system are far more important than the conviction and sentence of any one individual," the opinion stated.
The opinion opens with recognition of the unique circumstances of the Polanski case.
"In another chapter of what surely must be one of the longest-running sagas in California criminal justice history ..." the 70-page opinion begins.
Polanski remains under house arrest at his Swiss chalet. Authorities there say they will resolve whether to extradite the "Chinatown" and "Rosemary's Baby" director to the United States sometime next year.
A spokeswoman for the Los Angeles County district attorney's office had no immediate comment on the ruling. She said attorneys were still reading through the 70-page opinion.
A message was left with Polanski attorney Chad Hummel.
The appeals justices are the second court to raise concerns about Polanski's treatment by the courts. Los Angeles Superior Court Judge Peter Espinoza said earlier this year there appeared to be "substantial misconduct," but that Polanski had to return to the United States to argue for the case be tossed out.
