1980年，羅納德·裏根（Ronald Reagan ）當選總統。這時美國的經濟處於停滯不前的狀態，裏根在經濟主張減稅、縮小政府規模、減少對商業的管製，以刺激美國的經濟。美國經濟在歷經1981年-1982年的衰退後，於1983年開始了戲劇性的復蘇，這波經濟成長還維持了好幾年，直到裏根任期結束前都還未停止，成為美國史上為期最久的經濟擴張，原本高漲的失業率於1984年中旬已經降回了1981年早期的數字，並且在接下來幾年裏也持續下降。
同時裏根還積極推行反蘇的國際政策，曾聲稱要把蘇聯這個共産大國“送入煙灰缸”。東方集團在日益增長的經濟壓力下開始逐漸瓦解。1989年東歐許多共産政權相繼倒臺，東德與西德統一。而蘇聯則於老布什總統（George H.W. Bush）在任時，於1991年戲劇性的崩潰。冷戰時代就此結束。
Ronald Reagan produced a major realignment with his 1980 and 1984 landslides. In 1980, the Reagan coalition was possible because of Democratic losses in most social-economic groups. "Reagan Democrats" were those who usually voted Democratic, but were attracted by Reagan's policies, personality and leadership, notably his social conservatism and hawkish foreign policy. Reagan's economic policies (dubbed "Reaganomics") and the implementation of the Economic Recovery Tax Act of 1981 lowered income taxes from 70% to 28% over the course of seven years. Reagan continued to downsize government taxation and regulation. The U.S. experienced a recession in 1982; unemployment and business failures soon entered rates close to Depression-era levels. These negative trends reversed the following year, when the inflation rate decreased from 11% to 2%, the unemployment rate decreased to 7.5%, and the economic growth rate increased from 4.5 to 7.2%.
Reagan took a hard line against the Soviet Union, proclaiming it to be the Evil Empire. Reagan ordered a massive buildup of the U.S. military, incurring a costly budget deficit. Reagan introduced a complicated missile defense system known as the Strategic Defense Initiative (dubbed "Star Wars" by opponents) in which the U.S. could, in theory, shoot down missiles by means of laser systems in space. Though it was never fully developed or deployed, the Soviets were genuinely concerned about the possible effects of the program and the research and technologies of SDI paved the way for the anti-ballistic missile systems of today. The Reagan administration also provided covert funding and assistance to anti-Communist resistance movements worldwide. Reagan's interventions against Grenada and Libya were popular in the U.S., though his backing of the Contra rebels was mired in controversy. The arms-for-hostages scandal led to the convictions of such figures as Oliver North and John Poindexter. He shared many common views and goals with friend and ally Margaret Thatcher, the Prime Minister of the United Kingdom.
Reagan met with Soviet Leader Mikhail Gorbachev, who ascended to power in 1985, four times, and their summit conferences led to the signing of the INF Treaty. Gorbachev tried to save Communism in the Soviet Union first by ending the expensive arms race with America, then by shedding the East European empire in 1989. The Soviet Union collapsed in 1991, ending the US-Soviet Cold War.