US District Judge April Perry will hear arguments over a request to block the deployment of Illinois and Texas guard members.
Illinois Governor JB Pritzker and local officials strongly oppose the use of the guard.
An "element" of the 200 Texas guard troops sent to Illinois started working in the Chicago area on Wednesday, according to a US Northern Command spokesperson, who spoke to The Associated Press.
The spokesperson did not say where specifically the troops were sent.
The troops, along with about 300 from Illinois, arrived this week at a US Army Reserve Centre in Elwood, southwest of Chicago.
All 500 troops are under the Northern Command and have been activated for 60 days.
The guard members are in the city to protect US Immigration and Customs Enforcement buildings and other federal facilities and law enforcement personnel, according to Northern Command.
Chicago and Illinois on Monday filed a lawsuit to stop the deployments, calling them unnecessary and illegal.
Trump, meanwhile, has portrayed Chicago as a lawless "hellhole" of crime, though statistics show a significant recent drop in crime.
In a court filing in the lawsuit, the city and state say protests at a temporary ICE detention facility in the Chicago suburb of Broadview have "never come close to stopping federal immigration enforcement".
"The President is using the Broadview protests as a pretext," they wrote.
"The impending federal troop deployment in Illinois is the latest episode in a broader campaign by the President's administration to target jurisdictions the President dislikes."
The Republican president said on Wednesday that Chicago Mayor Brandon Johnson and Pritzker, both Democrats, should be jailed for failing to protect federal agents during immigration enforcement crackdowns.
Also Thursday, a panel of judges in the 9th US Circuit Court of Appeals was scheduled to hear arguments over whether Trump had the authority to take control of 200 Oregon National Guard troops.
The president had planned to deploy them in Portland, where there have been mostly small nightly protests outside an ICE building.
State and city leaders insist troops are neither wanted nor needed there.
US District Judge Karin J Immergut on Sunday granted Oregon and California a temporary restraining order blocking the deployment of guard troops to Portland.
Trump had mobilised California troops for Portland just hours after Immergut first blocked him from using Oregon's guard.
The administration has yet to appeal that order to the 9th Circuit.
Immergut, who Trump appointed during his first term, rejected the president's assertions that troops were needed to protect Portland and immigration facilities, saying "it had been months since there was any sustained level of violent or disruptive protest activity in the city".
The nearly 150-year-old Posse Comitatus Act limits the military's role in enforcing domestic laws.
However, Trump has said he would be willing to invoke the Insurrection Act, which allows a president to dispatch active duty military in states that are unable to put down an insurrection or are defying federal law.
Trump previously sent troops to Los Angeles and Washington, and a small number this week began assisting law enforcement in Memphis, Tennessee.
Those troops are part of the Memphis Safe Task Force, a collection of about a dozen federal law enforcement agencies ordered by Trump to fight crime in the city.
In contrast to others, Tennessee Republican Governor Bill Lee supports using the guard.
