In an effort to resolve differences with France that had accumulated between the two nations since the Treaty of Alliance of 1778, President John Adams dispatched a commission of three men to meet with French Minister of Foreign Affairs Talleyrand in 1797. After many delays the American commissioners were approached by three intermediaries of Talleyrand, who demanded apologies for allusions critical of France made by President Adams and payment of a bribe of several million dollars before official negotiations could proceed. Convinced that further negotiations were hopeless the three commissioners returned to the United States, and President Adams released their dispatches to Congress, substituting X, Y, and Z for the names of Talleyrand's agents. "I will never send another minister to France without assurances that he will be received, respected, and honored, as the representative of a great, free, powerful, and independent nation," Adams declared. The American public was outraged at publication of the dispatches, and Congress enacted a series of measures to raise an army and authorize a Navy Department. It also unilaterally abrogated treaties with France, authorizing privateers and public vessels to attack French ships found competing with American commerce. Between 1798 and 1800 the U.S. Navy captured more than 80 French ships, although neither country officially declared war.

The British delighted in the anti-French uproar in America and moved to assist the United States against a common foe, revolutionary France. President Adams wanted to avoid a major war, confident that had France wanted war it would have responded to American attacks on French ships. Talleyrand feared that limited hostilities with the United States might escalate into a fullscale war and let it be known that he would accept a new American diplomatic representative. Adams nominated a new representative to France despite public and Federalist disappointment that there would be no war, but conceded to Federalist demands and expanded the single nomination into a commission of three. Although the Franco-American negotiations were initially deadlocked, France finally agreed to cancel the Treaty of Alliance of 1778 if the United States dropped financial claims resulting from recent seizures of American merchant shipping. The resulting Convention of 1800 terminated the only formal treaty of alliance of the United States. It would be nearly a century and a half before the United States entered into another formal alliance.