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WASHINGTON—A divided Supreme Court Thursday upheld racial preferences in public-university admissions, a defeat to a yearslong conservative drive to roll back affirmative action.

Writing for a 4-3 court, Justice Anthony Kennedy found that the University of Texas at Austin's challenged plan, which gave a "plus factor" to certain black and Hispanic applicants, passed constitutional muster as a method to attain student diversity.

A university is entitled "considerable deference" in defining the type of institution it wished to be, including "intangible characteristics," such as "student body diversity" is that "are central to its identity and educational mission," Justice Kennedy wrote. He was joined by Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor.

Justice Samuel Alito, joined by Chief Justice John Roberts and Justice Clarence Thomas, dissented. To mark the intensity of his disagreement, Justice Alito read his dissent from the bench.

The decision came from a court with two vacant seats—one left by the February death of conservative Justice Antonin Scalia, another by the recusal of liberal Justice Elena Kagan, who as the Obama administration's solicitor general had participated in the case at earlier stages to support the university's position.

The case was the fourth time since the 1970s that the court has upheld racial preferences in college admissions, albeit with restrictions against numerical quotas or rigid set-asides for minorities. Justice Kennedy advised universities to continually review their affirmative action policies to ensure they meet constitutional standards.

The lawsuit was filed by Abigail Fisher, a white applicant who was denied admission by the University of Texas at Austin in 2008. She alleged that the state's flagship university violated the Constitution's equal-protection guarantee by giving an edge in admissions to black and Hispanic students.

The university disputed Ms. Fisher's claims, saying that it also rejected some minority applicants with higher grades and scores than she presented. But UT also said that maintaining the discretion to select a number of minority applicants that might not otherwise be admitted was essential to its ability to create a diverse undergraduate class.

Nearly the entire education establishment, including Ivy League colleges, flagship state universities and organizations such as the College Board and the National School Boards Association, supported UT's position, along with the Obama administration and major employers, including 3M Co., Aetna Inc., General Electric Co. and Procter & Gamble Co.

Ms. Fisher drew supporting briefs from several conservative advocacy groups, including the Pacific Legal Foundation and the libertarian Cato Institute.

Write to Jess Bravin at jess.bravin@wsj.com

(END) Dow Jones Newswires

June 23, 2016 11:05 ET (15:05 GMT)

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