The US and Japan have agreed plans to halve the number of US marines stationed on the island of Okinawa and to boost military ties.
Okinawans have long complained about the presence of US bases
Some 7,000 marines are to relocate to the US Pacific territory of Guam under plans agreed at talks in Washington.
US and Japanese forces will also set up joint operations and share bases, and cooperate on intelligence and training.
The moves are part of a joint strategy to dismantle static defences in order to confront new threats like terrorism.
US Secretary of State Condoleezza Rice and Defence Secretary Donald Rumsfeld were joined by their Japanese counterparts in Washington for the talks.
The US has had tens of thousands of troops in Japan, its most important Asian ally, since the end of World War II.
The decision to reduce the numbers in Okinawa, where about three-quarters of the US force is based, is likely to be popular with local residents, correspondents say.
About half of all US troops in Japan are based on Okinawa
The locals have long complained about the crime, pollution and noise from US bases - and Japan has been pushing for a redeployment of troops.
Three days ago, the US agreed it would relocate a military base on Okinawa from Futenma to Camp Schwab, near Henoko.
Japan has made a commitment to expand its own defence forces, which will train and operate alongside the US troops.
Tokyo has also agreed to the deployment of a powerful X-band radar, used to track long-range ballistic missiles, on its territory.
Earlier this week, Japan agreed to allow a US nuclear-powered aircraft carrier to be stationed in its waters for the first time from 2008.
At the same time, the US is looking for ways to make its military more flexible, stretched as it is by the continuing missions in Iraq and Afghanistan, the BBC's Chris Hogg in Tokyo says.
The Bush administration wants Japan to take a more active role in maintaining regional security, and it wants US and Japanese forces to be integrated more closely.
But because of Japan's past militarism, its neighbours - in particular China and South Korea - are wary of any move it makes away from its post-war pacifist stance, our correspondent says.
Japan's government also has problems selling such policies to its own people.
Many are wary of their prime minister's closeness to President George Bush, our correspondent adds, and will be unhappy if the redeployment of US troops from Okinawa means a greater military presence on their own doorstep.