Relations between the United States and Hungary following World War II were affected by the Soviet armed forces' occupation of Hungary. Full diplomatic relations were established at the legation level on October 12, 1945, before the signing of the Hungarian peace treaty on February 10, 1947. After the communist takeover in 1947–48, relations with the People's Republic of Hungary became increasingly strained by the nationalization of U.S.-owned property and what the United States considered unacceptable treatment of U.S. citizens and personnel, as well as restrictions on the operations of the American legation. Though relations deteriorated further after the suppression of the Hungarian Revolution of 1956, an exchange of ambassadors in 1966 inaugurated an era of improving relations. In 1972, a consular convention was concluded to provide consular protection to U.S. citizens in Hungary.

In 1973, a bilateral agreement was reached under which Hungary settled the nationalization claims of American citizens. On 6 January 1978, the United States returned the Holy Crown of Hungary, which had been safeguarded by the United States since the end of World War II. Symbolically and actually, this event marked the beginning of excellent relations between the two countries. A 1978 bilateral trade agreement included extension of most-favored-nation status to Hungary. Cultural and scientific exchanges were expanded. As Hungary began to pull away from the Soviet orbit, the United States offered assistance and expertise to help establish a constitution, a democratic political system, and a plan for a free market economy.