The US has said that it will resume aid to the military in Bahrain.
Security assistance has been withheld since 2011, when the Gulf state put down mass Shia-led protests.
But US State Department spokesman John Kirby said that Bahrain had made progress on human rights, including the release of political prisoners.
Bahrain is home to the US Navy's Fifth fleet and has flown airstrike missions over Syria as part of the US-led coalition against Islamic State (IS).
"We believe it is important to recognise that the government of Bahrain has made some meaningful progress on human rights reforms and reconciliation," State Department spokesman John Kirby said in a statement.
He added that this did not mean that the US thought the human rights situation in Bahrain was adequate.
"Following the lift of these holds, we will continue to press Bahrain on our human rights concerns," Mr Kirby said.
He gave no details about what the security assistance would entail.
The move was quickly criticised by rights groups. Sarah Margon, the Washington director of Human Rights Watch, said that the decision to lift restrictions was taking place without any "real or meaningful political reform" in Bahrain.
She said in a statement that "Bahrain's jails are bursting at the seams with political detainees and the recent prison sentence for political opposition leader, al-Wefaq secretary general Sheikh Ali Salman, means that a political accommodation remains as far away as ever."
Earlier in June, Sheikh Salman was jailed for four years for inciting hatred, promoting disobedience and "insulting" public institutions.
Shia-dominated demonstrations against Bahrain's Sunni monarchy have occurred sporadically since 2011.
Dozens died when the government moved to quash protests four years ago.