The last two decades of the twentieth century encompassed the administrations of Ronald Reagan (1981–1989), George H.W. Bush (1989–1993), and Bill Clinton (1993–2001).

Reagan was president during the last decade of the Cold War. As the last president during the Cold War, Reagan increased defense spending. He also got the United States heavily involved in Central America, which was one of the last Cold War "battlefields." Reagan sought to prevent communist expansionism in Central America and in Grenada. Unfortunately, he did this by supporting brutal, dictatorial regimes in Central America. In Grenada, in 1983, he sent in American troops and ousted the pro-Cuban regime. Relations with Moscow greatly improved in the late 1980s as Mikhail Gorbachev and Reagan signed arms control agreements. Reagan's successor, Bush, presided over the end of the Cold War from 1989–1993.

All three of these presidents were heavily involved in the Middle East and in an increasingly important struggle against terrorism. Reagan sent peacekeeping troops to Lebanon, but this ended in disaster when a terrorist attack killed 241 American troops. Also, Reagan bombed Libya after a terrorist bombing on a disco in West Berlin. Bush fought a major war against Iraq, so the Middle East was the primary focus of his foreign policy. Clinton sought to "contain" Iraq and promote peace between Israel and Arab nations. Terrorism gradually became the main concern of American foreign policy during the Clinton administration. In 1998, two American embassies in Africa were attacked by terrorists. In response, Clinton launched missiles against Sudan and Afghanistan. In 2000, the USS Cole was attacked by terrorists.