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A USCIS denial can be challenged by filing a request with the Administrative Appeals Office (AAO). However, AAO appeals are generally not required when challenging a USCIS denial (nor are they recommended – more on that later). The reason an AAO appeal is not required was explained in the summary holding of the 1993 Supreme Court case, Darby v. Cisneros:

Federal courts do not have the authority to require a plaintiff to exhaust available administrative remedies before seeking judicial review under the APA, where neither the relevant statute nor agency rules specifically mandate exhaustion as a prerequisite to judicial review.

So, should you file an AAO appeal to challenge a USCIS denial? Generally, no. The AAO typically confirms agency denials but in a more thorough fashion. This can make an eventual federal lawsuit challenging the denial (and the AAO decision confirming it) harder to win. You’re usually better off going straight to federal court.

One instance where an AAO appeal may make sense is if you need to materially add to an inadequate factual record that was created at the application stage. For example, if you failed to include some important facts that may help your case, filing an AAO appeal in order to add those facts could help. Because federal Judges decide APA cases based exclusively on the administrative record, having a complete record (and one that includes favorable facts) is important. Using the AAO appeal process to complete that record may make sense. Otherwise, skipping the AAO stage and going straight to federal court or sometimes refiling a petition is usually the best option.