The US relations with Saddam's regime were a direct result of the Iraq-Iran conflict in 1980. The Iraqi government was concerned about both the Islamic government in Iran, as well as the Soviet invasion of Afghanistan, and moved toward the west as a result. The United States was concerned about Iranian expansion into the Middle East, and did not want to see an Iraqi defeat.

The United States supported Iraq in the conflict, providing technological and economic aid, as well as sharing military intelligence about Iranian troop deployments. Diplomatic relations between the two countries were re-established in November 1984.

There were several incidents that strained the relationship in the 1980s: the disclosure of secret arms sales to Iran by the United States from 1985-1986, the Iraqi bombing of an American naval vessel in 1987, and the Iraqi use of chemical weapons on Kurdish civilians in Halabja in 1988. But none of these incidents were when things "went wrong".

The breakdown in relations began with the border dispute between Iraq and Kuwait. The July 1990 meeting between US ambassador April Glaspie and Saddam Hussein was a very important turning point. Glaspie had told Saddam that “We have no opinion on your Arab-Arab conflicts, such as your dispute with Kuwait”.

It's disputed as to how Saddam interpreted this statement. The first argument is that he thought it was a 'green light' to invade Kuwait, and that the US would stand by(suggested by professors John Mearsheimer and Stephen Walt). Another argument is that Saddam expected an American retaliation, but sincerely believed that he would prevail in a military conflict with the United States(suggested by Kenneth Pollack).

The August 1990 invasion of Kuwait would lead to American intervention in the first Gulf War, and relations would not be re-established until the 2003 invasion of Iraq.