Federal Reserve Notes are the currently issued banknotes of the United States dollar. The United States Bureau of Engraving and Printing, within the Department of the Treasury, produces the notes under the authority of the Federal Reserve Act of 1913 and issues them to the Federal Reserve Banks at the discretion of the Board of Governors of the Federal Reserve System. The Reserve Banks then circulate the notes to their member banks, at which point they become liabilities of the Reserve Banks and obligations of the United States.

Federal Reserve Notes are legal tender, with the words "this note is legal tender for all debts, public and private" printed on each note. The notes are backed by financial assets that the Federal Reserve Banks pledge as collateral, which are mainly Treasury securities and mortgage agency securities that they purchase on the open market by fiat payment.

Following the enactment of the Constitution, states began chartering commercial banks that issued their own notes. These notes were known as state bank notes. State bank notes did not achieve widespread acceptance outside of their state of issue. The first institution to issue notes with national acceptance in the U.S. was the nationally chartered First Bank of the United States, chartered in 1791 by Alexander Hamilton. Its charter was not renewed in 1811. In 1816, the Second Bank of the United States was chartered and its notes also acquired widespread acceptance; its charter was not renewed in 1836, after President Andrew Jackson campaigned heavily for its disestablishment. From 1837 to 1862, in the Free Banking Era, state bank notes were the only circulating paper currency again. From 1862 to 1913, a system of national banks was instituted by the 1863 National Banking Act. Banks authorized under this act were known as National Banks and issued their own National Bank Notes. These did achieve national acceptance but the U.S. still lacked a central bank. It wasn't until the passage of the Federal Reserve Act that the United States finally had an institution that issued nationally accepted bank notes and had the powers of a central bank.

Federal Reserve Notes have been printed from Series 1914 in large-note format, and from Series 1928 in modern-day (small-note) format. The latter dimensions originated from the size of the Philippine peso Silver Certificates issued in 1903 while William Howard Taft served as Philippine governor-general under the United States colonial administration. In view of its highly successful run, President Taft subsequently appointed a committee that reported favorably on the advantages and savings from adopting the dimensions of Philippine notes for use in the United States. Final implementation of today's small-size format, however, only occurred in 1928.

The authority of the Federal Reserve Banks to issue notes comes from the Federal Reserve Act of 1913. Legally, they are liabilities of the Federal Reserve Banks and obligations of the United States government. Although not issued by the United States Treasury, Federal Reserve Notes carry the (engraved) signature of the Treasurer of the United States and the United States Secretary of the Treasury.

At the time of the Federal Reserve's creation, the law provided for notes to be redeemed to the Treasury in gold or "lawful money." The latter category was not explicitly defined, but included United States Notes, National Bank Notes, and certain other notes held by banks to meet reserve requirements, such as clearing certificates. The Emergency Banking Act of 1933 removed the gold obligation and authorized the Treasury to satisfy these redemption demands with current notes of equal face value (effectively making change). Under the Bretton Woods system, although citizens could not legally possess gold (except as rare coins, jewelry, for industrial purposes, etc.), the federal government continued to maintain a stable international gold price. This system ended with the Nixon Shock of 1971. Present-day Federal Reserve Notes are not backed by convertibility to any specific commodity, but only by the collateral assets that Federal Reserve Banks post in order to obtain them.

A commercial bank that maintains a reserve account with the Federal Reserve can obtain notes from the Federal Reserve Bank in its district whenever it wishes. The bank must pay the face value of the notes by debiting (drawing down) its reserve account. Smaller banks without a reserve account at the Federal Reserve can maintain their reserve accounts at larger "correspondent banks" which themselves maintain reserve accounts with the Federal Reserve.

Federal Reserve Notes are printed by the Bureau of Engraving and Printing (BEP), a bureau of the Department of the Treasury. When Federal Reserve Banks require additional notes for circulation, they must post collateral in the form of direct federal obligations, private bank obligations, or assets purchased through open market operations. If the notes are newly printed, they also pay the BEP for the cost of printing (about 4¢ per note). This differs from the issue of coins, which are purchased for their face value.