The US disliked Iraqi support for many Arab and Palestinian militant groups such as Abu Nidal, which led to Iraq's inclusion on the developing US list of State Sponsors of Terrorism on 29 December 1979.

The US remained officially neutral after Iraq's invasion of Iran in 1980, which became the Iran–Iraq War, although it provided resources, political support, and some "non-military" aircraft to Iraq.

With Iraq's newfound success in the war, and the Iranian rebuff of a peace offer in July, arms sales to Iraq reached a record spike in 1982.

In March 1982, Iran began a successful counteroffensive (Operation Undeniable Victory), and the US increased its support for Iraq to prevent Iran from forcing a surrender.

When Iraqi President Saddam Hussein expelled Abu Nidal to Syria at the US's request in November 1983, the Reagan administration sent Donald Rumsfeld to meet Saddam as a special envoy and to cultivate ties.

On 22 May 1984, President Reagan was briefed on the project conclusions in the Oval Office by William Flynn Martin who had served as the head of the NSC staff that organized the study. The full declassified presentation can be seen here. The conclusions were threefold: first, oil stocks needed to be increased among members of the International Energy Agency and, if necessary, released early in the event of oil market disruption; second, the United States needed to beef up the security of friendly Arab states in the region; and third, an embargo should be placed on sales of military equipment to Iran and Iraq. The plan was approved by President Reagan and later affirmed by the G-7 leaders headed by the United Kingdom's Prime Minister, Margaret Thatcher, in the London Summit of 1984. The plan was implemented and became the basis for US preparedness to respond to the Iraqi occupation of Kuwait in 1991.

By the time the ceasefire with Iran was signed in August 1988, Iraq was heavily debt-ridden and tensions within society were rising.

In early July 1990, Iraq complained about Kuwait's behavior, such as not respecting their quota, and openly threatened to take military action.

On 15 July 1990, Saddam's government laid out its combined objections to the Arab League, including that policy moves were costing Iraq $1 billion a year, that Kuwait was still using the Rumaila oil field, that loans made by the UAE and Kuwait could not be considered debts to its "Arab brothers".

In spite of Iraqi saber rattling, Kuwait did not mobilize its force; the army had been stood down on 19 July, and at the time of the Iraqi invasion many Kuwaiti military personnel were on leave.

On the 25th, Saddam met with April Glaspie, the US Ambassador to Iraq, in Baghdad.

Discussions in Jeddah, Saudi Arabia, mediated on the Arab League's behalf by Egyptian President Hosni Mubarak, were held on 31 July and led Mubarak to believe that a peaceful course could be established.

The result of the Jeddah talks was an Iraqi demand for $10 billion to cover the lost revenues from Rumaila; Kuwait offered $500 million. The Iraqi response was to immediately order an invasion, which started on 2 August 1990 with the bombing of Kuwait's capital, Kuwait City.

On 2 August 1990 the Iraqi Army invaded and occupied Kuwait, which was met with international condemnation and brought immediate economic sanctions against Iraq by members of the UN Security Council. Together with the UK prime minister Margaret Thatcher, who had resisted the invasion by Argentina of the Falkland Islands a decade earlier, American President George H. W. Bush deployed US forces into Saudi Arabia, and urged other countries to send their own forces to the scene.

On 3 August 1990, the Arab League passed its own resolution, which called for a solution to the conflict from within the league, and warned against outside intervention. Iraq and Libya were the only two Arab League states that opposed the resolution for Iraq to withdraw from Kuwait; the Palestine Liberation Organization (PLO) opposed it as well.

On 6 August, Resolution 661 placed economic sanctions on Iraq. Resolution 665 followed soon after, which authorized a naval blockade to enforce the sanctions. It said the "use of measures commensurate to the specific circumstances as may be necessary ... to halt all inward and outward maritime shipping in order to inspect and verify their cargoes and destinations and to ensure strict implementation of resolution 661".

Out of fear the Iraqi Army could launch an invasion of Saudi Arabia, US President George H. W. Bush quickly announced that the US would launch a "wholly defensive" mission to prevent Iraq from invading Saudi Arabia, under the codename Operation Desert Shield. The operation began on 7 August 1990, when US troops were sent to Saudi Arabia, due also to the request of its monarch, King Fahd, who had earlier called for US military assistance.

The US Navy dispatched two naval battle groups built around the aircraft carriers USS Dwight D. Eisenhower and USS Independence to the Persian Gulf, where they were ready by 8 August.

The Emir (Jaber Al-Ahmad Al-Jaber Al-Sabah) and key ministers were able to get out and head south along the highway for refuge in Saudi Arabia. Iraqi ground forces consolidated their control of Kuwait City, then headed south and redeployed along the Saudi border. After the decisive Iraqi victory, Saddam initially installed a puppet regime known as the "Provisional Government of Free Kuwait" before installing his cousin Ali Hassan al-Majid as Kuwait's governor on 8 August.

On 12 August 1990, Saddam "propose that all cases of occupation, and those cases that have been portrayed as occupation, in the region, be resolved simultaneously". Specifically, he called for Israel to withdraw from occupied territories in Palestine, Syria, and Lebanon, Syria to withdraw from Lebanon, and "mutual withdrawals by Iraq and Iran and arrangement for the situation in Kuwait".

On 23 August, Saddam appeared on state television with Western hostages to whom he had refused exit visas. In the video, he asks a young British boy, Stuart Lockwood, whether he is getting his milk, and goes on to say, through his interpreter, "We hope your presence as guests here will not be for too long. Your presence here, and in other places, is meant to prevent the scourge of war".

To ensure that economic backing, Baker went on an 11-day journey to nine countries in September 1990, which the press dubbed "The Tin Cup Trip". The first stop was Saudi Arabia, which a month before had already granted permission to the United States to use its facilities.

The US and the UN gave several public justifications for involvement in the conflict, the most prominent being the Iraqi violation of Kuwaiti territorial integrity. In addition, the US moved to support its ally Saudi Arabia, whose importance in the region, and as a key supplier of oil, made it of considerable geopolitical importance. Shortly after the Iraqi invasion, US Defense Secretary Dick Cheney made the first of several visits to Saudi Arabia where King Fahd requested US military assistance. During a speech in a special joint session of the US Congress given on 11 September 1990, US President George Bush summed up the reasons with the following remarks: "Within three days, 120,000 Iraqi troops with 850 tanks had poured into Kuwait and moved south to threaten Saudi Arabia. It was then that I decided to act to check that aggression".

A series of UN Security Council resolutions and Arab League resolutions were passed regarding Iraq's invasion of Kuwait. One of the most important was Resolution 678, passed on 29 November 1990, which gave Iraq a withdrawal deadline until 15 January 1991, and authorized "all necessary means to uphold and implement Resolution 660", and a diplomatic formulation authorizing the use of force if Iraq failed to comply.

On 29 November 1990, the Security Council passed Resolution 678, which gave Iraq until 15 January 1991 to withdraw from Kuwait, and empowered states to use "all necessary means" to force Iraq out of Kuwait after the deadline.

In December 1990, Iraq made a proposal to withdraw from Kuwait provided that foreign troops left the region and that an agreement was reached regarding the Palestinian problem and the dismantlement of both Israel's and Iraq's weapons of mass destruction. The White House rejected the proposal.

On 14 January 1991, France proposed that the UN Security Council call for "a rapid and massive withdrawal" from Kuwait along with a statement to Iraq that Council members would bring their "active contribution" to a settlement of the region's other problems, "in particular, of the Arab–Israeli conflict and in particular to the Palestinian problem by convening, at an appropriate moment, an international conference" to assure "the security, stability and development of this region of the world".

The Gulf War began with an extensive aerial bombing campaign on 16 January 1991.

On 17 January 1991 the 101st Airborne Division Aviation Regiment fired the first shots of the war when eight AH-64 helicopters successfully destroyed two Iraqi early warning radar sites.

The initial conflict to expel Iraqi troops from Kuwait began with an aerial and naval bombardment on 17 January 1991, continuing for five weeks. This was followed by a ground assault on 24 February.

As the Scud attacks continued, the Israelis grew increasingly impatient, and considered taking unilateral military action against Iraq. On 22 January 1991, a Scud missile hit the Israeli city of Ramat Gan, after two coalition Patriots failed to intercept it. Three elderly people suffered fatal heart attacks, another 96 people were injured, and 20 apartment buildings were damaged.

On 29 January, Iraqi forces attacked and occupied the lightly defended Saudi city of Khafji with tanks and infantry. The Battle of Khafji ended two days later when the Iraqis were driven back by the Saudi Arabian National Guard, supported by Qatari forces and US Marines. The allied forces used extensive artillery fire.

Task Force 1-41 Infantry was a U.S. Army heavy battalion task force from the 2nd Armored Division. It was the spearhead of VII Corps, consisting primarily of the 1st Battalion, 41st Infantry Regiment, 3rd Battalion, 66th Armor Regiment, and the 4th Battalion, 3rd Field Artillery Regiment. Task Force 1–41 was the first coalition force to breach the Saudi Arabian border on 15 February 1991, and to conduct ground combat operations in Iraq engaging in direct and indirect fire fights with the enemy on 17 February 1991.

On 15 February 1991 4th Battalion of the 3rd Field Artillery Regiment fired on a trailer and a few trucks in the Iraqi sector that were observing American forces.

On 16 February 1991 several groups of Iraqi vehicles appeared to be performing reconnaissance on the Task Force and were driven away by fire from 4–3 FA.

On 17 February 1991 the Task Force took enemy mortar fire, but the enemy forces managed to escape.

On 22 February 1991, Iraq agreed to a Soviet-proposed ceasefire agreement. The agreement called for Iraq to withdraw troops to pre-invasion positions within six weeks following a total ceasefire, and called for monitoring of the ceasefire and withdrawal to be overseen by the UN Security Council.

On 23 February, fighting resulted in the capture of 500 Iraqi soldiers.

Shortly afterwards, the US VII Corps, in full strength and spearheaded by the 2nd Armored Cavalry Regiment, launched an armored attack into Iraq early on 24 February, just to the west of Kuwait, taking Iraqi forces by surprise. Simultaneously, the US XVIII Airborne Corps launched a sweeping "left-hook" attack across southern Iraq's largely undefended desert, led by the US 3rd Armored Cavalry Regiment and the 24th Infantry Division.

On 24 February 1991 the 1st Cavalry Division conducted a couple artillery missions against Iraqi artillery units.

On 24 February 2nd Brigade, 1st Infantry Division rolled through the breach in the Iraqi defense west of Wadi Al-Batin and also cleared the northeastern sector of the breach site of enemy resistance.

On 24 February, British and American armored forces crossed the Iraq–Kuwait border and entered Iraq in large numbers, taking hundreds of prisoners. Iraqi resistance was light, and four Americans were killed.

On 25 February 1991, a Scud missile hit a US Army barracks of the 14th Quartermaster Detachment, out of Greensburg, Pennsylvania, stationed in Dhahran, Saudi Arabia, killing 28 soldiers and injuring over 100.

On 27 February, Saddam ordered a retreat from Kuwait, and President Bush declared it liberated. However, an Iraqi unit at Kuwait International Airport appeared not to have received the message and fiercely resisted. US Marines had to fight for hours before securing the airport, after which Kuwait was declared secure.

On 10 March 1991, 540,000 US troops began moving out of the Persian Gulf.

On March 15, 1991, the US-led coalition restored to power Sheikh Jaber al-Ahmad al-Sabah, the unelected authoritarian ruler of Kuwait. Kuwaiti democracy advocates had been calling for restoration of Parliament that the Emir had suspended in 1986.