The magazine caricatured Erdogan as an elephant, a giraffe, a monkey and several other animals under the title "The World of Tayyips". But the court ruled in Tuesday's hearing that the cartoons were not offensive and did not carry the intention of insulting the prime minister.
Penguen's front page was meant to protest a fine imposed on a political cartoonist who had depicted Erdogan as a cat entangled in a ball of wool over the government's failure to pass a bill easing conditions for religious school graduates to pursue higher education in fields other than theology.
The case prompted critics to question the sincerity of Erdogan's stated desire to improve rights and liberties to ease Turkey's entry to the European Union. Erdogan has long advocated the need to expand freedom of expression in Turkey, citing himself as a victim of undemocratic restrictions. He served a four-month jail sentence for sedition in the late 1990s for reciting a poem with Islamist messages at a political rally.