In granting the stay, the three-judge Third Circuit panel remanded the case to U.S. District Judge John E. Jones III so Jones could explain why he permitted Michael to appeal further after deciding Wednesday to deny his petition to stay the execution.
With hours to go before Michael's scheduled execution, lawyers for the state Attorney General's Office filed an emergency petition with the U.S. Supreme Court to reverse the Third Circuit's ruling.
The high court rejected the state's appeal at about 8:30 p.m.
"On behalf of Hubert Michael, we are extremely pleased that the U.S. Supreme Court upheld the stay of execution issued by the Court of Appeals," said Helen Marino, chief of the Federal Defender's death-penalty unit, which represented Michael.
"The courts recognized that there are compelling claims relating to Mr. Michael's debilitating mental conditions that have never been reviewed by any court [and] agreed that the Court of Appeals acted reasonably in light of the complexity of Mr. Michael's case."
Susan McNaughton, a spokeswoman for the state Department of Corrections, said after the ruling: "If and when the stay is lifted by the court, the execution will be scheduled directly."
Marc Bookman, executive director of the Philadelphia nonprofit Atlantic Center for Capital Representation, praised the courts for agreeing to take another look at the merits of Michael's appeal: "Mr. Michael's severe mental illness badly affected his ability to properly litigate his claims. I'm sure the District Court will examine the matter closely and determine the appropriate next step for the proceedings."
Bookman has called Michael's case an example of "suicide by justice system."
Reporters had gathered outside the Rockview prison Thursday evening, and four people turned out to protest the pending execution, McNaughton said.
Inside the prison, six citizen witnesses, six media witnesses, and up to four of the victim's family members had assembled.
According to a statement given to reporters, Michael arrived at the prison at 6:09 a.m. Thursday. He ate a breakfast of French toast, orange juice, and coffee.
McNaughton said Michael had been quiet, polite, and composed. He was told he had the option to request a sedative, but he did not, she said.
She said Michael was "somewhat emotional" as he was transported from Greene state prison, in Western Pennsylvania, to Rockview.
A "spiritual adviser" visited Michael for almost an hour Thursday afternoon, McNaughton said.
As Michael waited to learn whether the Supreme Court would spare his life, he read his Bible and newspapers, and listened to the radio in his cell, about 20 feet from the execution chamber.
In 1994, Michael waived his right to a jury trial and pleaded guilty to first-degree murder in the shooting of Eng, 16. Michael then waived his sentencing hearing, agreed that his case justified use of the death penalty, and accepted the death sentence from a York County Court judge.
At a 1997 hearing, his former public defender testified that Michael told him that he had picked up the girl hitchhiking, bound her with electrical cord stolen from her home, raped her, and killed her on state game land.
He was not charged with rape because of a lack of physical evidence, though prosecutors suspected it. Michael allegedly confessed to his brother, who located Eng's remains about a month after she had disappeared and called police. She had been shot in the head and chest.
For a decade after his guilty plea, Michael opposed any appeals. But weeks before his first scheduled execution, in 2004, he filed a federal appeal. State prosecutors have maintained that he effectively waived his right to challenge execution in the decade he opposed appeals.
On Wednesday, Pennsylvania's Board of Pardons voted unanimously to deny Michael's petition to commute his death sentence to life without parole.
Only Heidnik - put to death July 6, 1999, for raping, enslaving, and murdering women in his North Philadelphia home - and two other people have been executed in Pennsylvania since the state reenacted the death penalty in 1978. All three had dropped their appeals and asked to die.
Pennsylvania has more than 200 people on death row; only California, Texas, and Florida have more.
Contact Joseph A. Slobodzian at 215-854-2985 or email@example.com, or follow on Twitter @joeslobo.
This article contains information from the Associated Press.