President Barack Obama announced Wednesday that the two countries are formally reestablishing diplomatic ties with the opening of embassies in each other's capitals, marking the most momentous step in the diplomatic thaw Obama initiated with Cuba in December.
It puts the U.S. on a path of access to the island that many Americans tourists might like to enjoy, but stops just shy of open travel.
The agreement does, though, mark the most sweeping change in U.S. policy toward the nation that lies just 100 miles off the U.S. coast since the U.S. embargo on Cuba started in the early 1960s.
There's a lot at play though. Here are 10 things you need to know:
When did the U.S. and Cuba agree to reopen embassies?
A public dialogue between the two countries resumed in December, when Obama and Cuban President Raul Castro announced that they would begin working to normalize relations. That came at the same time as Cuba agreed to release Alan Gross, an American aid worker imprisoned in Cuba since 2009 -- an apparent show of good faith from the Cuban government.
Since December, U.S. and Cuban officials began negotiations to reestablish diplomatic ties and normalize relations between the two countries, including putting an embassy in each country's capital.
Obama then took a big step in April that led to the removal of Cuba from the U.S. list of state sponsors of terrorism. Cuba had sat on that list since 1982.
All of that, though, has yet to fully lift the U.S. embargo on Cuba, a move that would allow Americans and Cubans to freely travel between the two countries and engage in any trade.
Why did the embargo start in the first place?
The U.S. began imposing sanctions against Cuba after Fidel Castro seized power in 1959 and soon after he nationalized more than $1 billion in American assets on the island. That's two years before Obama was even born.
The U.S. ratcheted up sanctions
on Cuba in 1960 and 1961 with President John F. Kennedy making the embargo official
Diplomatic relations between the United States and Cuba broke off in 1961, with tensions increasing after Cuba signed a trade agreement with the Soviet Union. Relations remained mostly frozen throughout the Cold War.
Today, Cuba remains an autocratic regime -- Fidel Castro's brother Raul is president -- with a poor record on human rights and a track record of silencing dissent and restricting the rights of its citizens.
What kind of restrictions does the embargo currently impose?
The embargo not only keeps American companies from doing business in Cuba, but it also prohibits most Americans from traveling directly there or spending money as tourists.
American citizens can face up to a $65,000 fine for spending money in Cuba, according to the U.S. Treasury. The embargo also limits the amount of individuals can send to family living in Cuba.
So what's changed now?
In addition to reopening embassies in each country, the U.S. will ease travel restrictions
, so it will be easier for Americans to travel to Cuba and do business there. Though the embargo officially blocks such activities, the White House has discretion about the application of certain measures, and several presidents have found ways to ease the restrictions even as the overall embargo remains in place.
U.S. and Cuban banks will be allowed to start building relationships and that means American travelers will be able to use their credit and debit cards when visiting.
Americans returning from a trip to Cuba can now return with up to $400 in Cuban goods, a quarter of which can be spent on alcohol and tobacco.
Think Cuban cigars.
And in return, Cuba freed 53 political prisoners and relaxed its restrictions on Internet access. Gross had been arrested after delivering satellite phones and other communications equipment to Cuba's small Jewish population.
So why doesn't Obama just end the embargo altogether?
He can't. Only Congress can end a trade embargo, which is enshrined into law. But according to White House officials, the President can ease certain restrictions under his executive authority.
This is the third time Obama has acted to ease the embargo. But policy changes
in 2009 and 2011, which eased travel restrictions for Cuban-Americans and later for academics and religious groups, didn't come close to the scope of Wednesday's landmark agreement.
Does the U.S. have international backing to keep the embargo in place?
Barely. Over the last two decades, the United Nations General Assembly has voted each year against the embargo, calling on the U.S. to reverse its policy.
Only Israel has joined the U.S. in voting against the resolution.
What's the political climate like in the U.S.?
It's shifting and more political leaders and Cuban-Americans have been calling for
changes in the U.S. policy toward Cuba in recent years.
Cuban refugees in America and their descendants have historically been the most vocal group in calling for a tough U.S. policy against Cuba. But nearly 7 in 10 Cubans now favor reestablishing diplomatic relations with Cuba and about half want the U.S. to end the embargo, according to a Florida International University poll this summer.
That has changed the climate of politics in the Miami area and throughout Florida, where most Cuban Americans reside, a shift that is sending ripples throughout the country.
What have politicians been saying about Cuba recently and what's the Pope got to do with it?
Former Secretary of State and 2016 presidential candidate Hillary Clinton has called for an end to the embargo,
calling it "Fidel Castro's best friend."
Many Republican presidential candidates, however, have slammed the move.
Former Florida Gov. Jeb Bush said this year
the ban should actually be strengthened, not lifted.
And Sen. Marco Rubio, whose parents fled Cuba after Fidel Castro's takeover, has called the embargo
"the last tool we have remaining to ensure that democracy returns to Cuba one day."
Obama, though, has said normalization will increase American influence on Cuba and help efforts to improve its record on human rights.
He shook hands with Castro at Nelson Mandela's funeral in South Africa in a moment that played on TV screens around the world. Since then, negotiations have continued and even the Pope weighed in. He wrote letters to both Obama and Castro earlier this year encouraging compromise.
How did Gross's detention impacted the debate?
Gross's imprisonment in 2009 set off a series of diplomatic exchanges between the two countries that involved prominent U.S. politicians.
Sen. Patrick Leahy, chair of the Senate Judiciary Committee, led congressional delegations
to Cuba in 2012 and 2013 to secure Gross's release. The delegation in 2013 included three Democratic Senators, a Republican Senator and two Democratic congressmen.
That same year, 66 senators wrote to Obama urging him to "act expeditiously to take whatever steps are in the national interest to obtain [Gross's] release."
And in November, Sens. Jeff Flake, a Republican, and Tom Udall, a Democrat, traveled to Cuba in another attempt to negotiate Gross's release.
In 2011, former President Jimmy Carter also made an attempt as did former New Mexico Gov. Bill Richardson, both of whose efforts were backed by the State Department.
Sounds like a lot of political capital has been poured into this effort. How much has Cuba been impacted by the embargo?
Cuba said in 2011 that the economic damage of the U.S. embargo has topped $1 trillion
in its five-decade history.
The embargo's crippling effects on the Cuban economy prompted Raul Castro to beef up efforts to end the embargo once he took the helm in 2008.
While Cuba was sustained by a serious trading relationship with the Soviet Union throughout the Cold War, the Cuban economy took a hard hit with the Soviet Union's collapse in 1991.