After the June 12, 1993, presidential election was annulled, and in light of human rights abuses and the failure to embark on a meaningful democratic transition, the United States imposed numerous sanctions on Nigeria. These sanctions included the imposition of Section 212(f) of the Immigration and Nationality Act to refuse entry into the United States of senior government officials and others who formulated, implemented, or benefited from policies impeding Nigeria's transition to democracy; suspension of all military assistance; and a ban on the sale and repair of military goods and refinery services to Nigeria. The U.S. Ambassador was recalled for consultations for four months after the execution of the Ogoni Nine on November 10, 1995.

After a period of increasingly strained relations, the death of General Abacha in June 1998 and his replacement by General Abubakar opened a new phase of improved bilateral relations. As the transition to democracy progressed, the removal of visa restrictions, increased high-level visits of U.S. officials, discussions of future assistance, and the granting of a Vital National Interest Certification on counter-narcotics, effective in March, 1999, paved the way for re-establishment of closer ties between the United States and Nigeria, as a key partner in the region and the continent. Since the inauguration of the democratically elected Obasanjo government, the bilateral relationship has continued to improve, and cooperation on many important foreign policy goals, such as regional peacekeeping, has been good.

The government has lent strong diplomatic support to the U.S. Government counter-terrorism efforts in the aftermath of the September 11 terrorist attacks. The Government of Nigeria, in its official statements, has both condemned the terrorist attacks as well as supported military action against the Taliban and Al Quaida. Nigeria also has played a leading role in forging an anti-terrorism consensus among states in Sub-Saharan Africa.