The jury in Idaho found Sami al-Hussayin, a computer science student at the University of Idaho, not guilty on Thursday.
Al-Hussayin was charged with three counts of aiding terrorist groups and 11 counts of immigration and visa fraud.
He was found not guilty on the three terrorism-related charges and two of the immigration charges, but the jury told federal Judge Edward Lodge that it was unable to agree on a verdict on the remaining charges.
Federal officials arrested al-Hussayin in March 2003. Defence lawyers contended al-Hussayin's work on a number of Islamist websites was simply volunteer help for a charity and constitutionally protected free speech.
Federal prosecutors argued his work was an attempt to raise money for groups in Chechnya and Palestine. During the trial, prosecutors linked al-Hussayin to the al-Haramain Islamic Foundation, which the Saudi government shut down on 2 June.
His arrest was part of a nationwide effort to strengthen law enforcement in what President George Bush calls a "war on terror". Some human rights groups have complained of overzealous prosecutions.
Al-Hussayin remained expressionless as the first two verdicts were read, but smiled and appeared relieved when the not-guilty verdict on the last of three terror charges was read out.
Still in jail
Despite his legal victory, the student remains in jail. In an earlier ruling in a separate immigration action against al-Hussayin, a judge ordered him deported to Saudi Arabia.
Jurors left the courthouse under guard shortly after noon, declining any comment.
Defence attorney David Nevin could not be reached for comment.
Tom Moss, US Attorney for the District of Idaho, said he was disappointed by the jury's decision and would confer with his attorneys next week to decide whether to re-file on the
"We accept the outcome and respect Judge Lodge, the members of the jury and the laws of our society," Moss said.
"My office and the Department of Justice remain committed to aggressively pursue those who provide illegal support to terrorists."