The US closed its Somalia embassy in 1991 after civil war broke out in the country.
The US has reopened its embassy in Somalia 28 years after it closed it. The previous one was closed in January 1991 after civil war broke out in Somalia.
Long-time leader Siad Barre was removed from office in 1991 by clan militias, who then fought each other for power.
The Horn of Africa nation has since then been riven by clan conflict and violence.
A statement from the US embassy on Wednesday said that reopening of the embassy follows last year's establishment of a permanent diplomatic presence in the capital, Mogadishu.
It added that: "[It] is another step forward in the resumption of regular US-Somalia relations, symbolising the strengthening of US-Somalia relations and advancement of stability, development, and peace for Somalia, and the region."
The US ambassador to Somalia Donald Yamamoto said that the opening of the embassy was "significant and historic" and was "another step forward in regularising US diplomatic engagement in Mogadishu since recognising the federal government of Somalia in 2013."
The US is Somalia's biggest donor, giving $730 million (£590 million) worth of aid last year, news agency Reuters reports quoting an official at the US State Department.
The US has also been a key ally in the fight against militants al-Shabaab who want to overthrow the UN-recognised government.
On Monday, al-Shabaab militants attacked a military base where US soldiers train Somali commandos.
Military officials said the jihadists were repulsed without breaching the perimeter fence.
No casualties were reported among the Somali military.