Farmer Colin Bagley erected the 41.8-metre high turbine at Upper Pengarth, Llandeilo Graban, near Builth Wells, last year.
Powys County Council had granted planning consent for the turbine in May 2015.
But now its future is in doubt after Appeal Court judges in London overturned the permission and ordered the council to reconsider.
The ruling was a victory for local resident, Graham Williams, who has fought Begley's proposals.
The Court of Appeal's ruling was the second time that Williams has succeeded in overturning planning consent for the turbine.
Lord Justice Lindblom ruled that the council had failed in its duty under section 66(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990 to have "special regard" to preserving the setting of grade II* listed Llanbedr Church, which is about 1.5 kilometres from the turbine, on the other side of a hill.
Although the turbine could not be seen from the church, both might appear in more distant views, the court was told.
But the judge said the officer's report on which the council based its decision made no mention of the duty under section 66(1) or the impact that the turbine might have on the church's unspoilt rural setting.
The council might have decided that that impact would be acceptable, but it "had to confront the issue" and its failure to do so was "deficient and therefore unlawful."
The judge, sitting with Lord Justice Irwin, expressed "a good deal of sympathy" for Bagley, whose wind turbine is now under threat.
But the council's failure to grapple with the potential impact on the church's setting meant that the planning permission had to be quashed.
Lord Justice Lindblom urged the council to "lose no time" in reconsidering the turbine's future.
R on the Application of Williams v Powys County Council. Case Number: C1/2016/1419