US President Barack Obama has announced that US companies will now be allowed to "responsibly do business in Burma".
He enacted promises given last month to ease investment restrictions.
But he warned that the US remained "deeply concerned" over a lack of transparency, and insisted that rights abusers would continue to be subject to the sanctions regime.
Mr Obama was rewarding the Burmese government for its recent reforms and release of political prisoners.
"Easing sanctions is a strong signal of our support for reform, and will provide immediate incentives for reformers and significant benefits to the people of Burma," he said in a statement.
But he said that entities belonging to the army or ministry of defence would not be covered by the move.
"In addition, US companies will be asked to report on their activities in line with international corporate governance standards," the statement added.
Controversial
The Associated Press reports that US firms have been given the go-ahead to invest in projects with state-owned Myanma Oil and Gas Enterprise.
The move would be controversial because Nobel laureate Aung San Suu Kyi last month explicitly urged foreign firms not to do business with the enterprise.
Meanwhile, the first US ambassador to Burma in 22 years, Derek Mitchell, has arrived in the country and met President Thein Sein.
The upgrading of diplomatic relations is part of the process of greater recognition for the Burmese government.
Since 2010, the government has overseen a transition from authoritarian rule to a more inclusive system.
The EU, Australia and other countries have already eased sanctions against the country.-British Broadcasting Corporation (July 11, 2102)
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