A court in Frankfurt ruled that the firm lacked the necessary legal permits to operate under German law.
It has emerged that the firm was told last week that its "low-cost" UberPop service could no longer take passengers and faced a fine if it continued.
But an Uber spokesman said it had decided not to suspend the service, adding that the ban was not enforceable while an appeal process was ongoing.
"Germany is one of the fastest growing markets for Uber in Europe," he said.
"We will continue to operate in Germany and will appeal the recent lawsuit filed by Taxi Deutschland in Frankfurt.
"You cannot put the brakes on progress. Uber will continue its operations and will offer UberPop ridesharing services via its app throughout Germany."
A check of the firm's software confirms that drivers continue to offer UberPop pick-ups in Munich, Berlin, Hamburg, Frankfurt and Dusseldorf.
UberPop vehicles include the Volkswagen Golf, Audi A4 and BMW 3ER
UberPop was launched earlier this year and involves drivers - who are not directly employed by the company - over the age of 21 using their own cars to transport passengers.
Taxi Deutschland suggested that Uber could face up to a 250,000 euro ($327,840; £198,342) fine per trip if the American firm loses the case.
The body described its rival as a "form of locust share-economy" indulging in "anarchy capitalism" that could leave passengers exposed in the case of an accident.
"In Germany there's insurance that applies to private drivers," explained spokeswoman Anja Floetenmeyer.
"But if your insurer learns that you are driving for an app and you want to make money on that, they say this is a multiple risk and refuse to [pay] insurance on that.
"Uber doesn't care because security costs money. We don't believe it has the interests of [German] drivers and citizens at heart."
But Uber's spokesman in Germany, Fabien Nestmann, has previously blogged that safety is one of his firm's key concerns, adding that "all the rides - and thus all travellers - are insured by Uber".
The summary judgment follows a decision by London's transport authorities not to pursue a case against Uber in June this year.
The San Francisco-based firm allows passengers to summon cars using an app on their smartphones and calculates the fare en route. It is often significantly cheaper than rival taxi companies.
Taxi driver in Berlin held a protest against ride-sharing apps in June
But taxi drivers argue that Uber has fewer regulatory burdens placed upon it than they do, and poses unfair competition.
The company - which is backed by Google and the bank Goldman Sachs, among others - has been the subject of protests by taxi drivers in many European cities, including Berlin, Paris and London.
Only last week, Uber said it was planning to rapidly expand its German operation.