That year, Naval Air Station Keflavik closed and the two countries signed a technical agreement on base closure issues (e.g., facilities return, environmental cleanup, residual value) and a "joint understanding" on future bilateral security cooperation (focusing on defending Iceland and the North Atlantic region against emerging threats such as terrorism and trafficking).

The United States also worked with local officials to mitigate the impact of job losses at the Air Station, notably by encouraging U.S. investment in industry and tourism development in the Keflavik area.

U.S. policy aims to maintain close, cooperative relations with Iceland, both as NATO allies and as states interested in the shared objectives of enhancing world peace, respect for human rights, economic development, arms control, and law enforcement cooperation, including the fight against terrorism, narcotics, and human trafficking.

Secretary of State Colin Powell attended a NATO summit in Iceland in May 2002, and his successor, Condoleezza Rice, visited the country in May 2008.

Secretary of State Antony Blinken visited Iceland in 2021 for the annual Arctic Council meeting, where he met with Prime Minister Katrín Jakobsdóttir and President Guðni Jóhannesson.

Icelandic President Ólafur Ragnar Grímsson attended a technology summit hosted by Alaska Governor Sarah Palin in October 2007.

On May 13, 2016, President Barack Obama hosted a summit and state dinner for Nordic leaders from Iceland, Norway, Sweden, Denmark, and Finland.