In the terminology of the United States insular areas, a commonwealth is an organized territory that has established with the Federal Government a more highly developed relationship, usually embodied in a written mutual agreement.

There are currently two United States insular areas holding the status of commonwealth, the Northern Mariana Islands and Puerto Rico. The Philippine Islands was an insular area that held commonwealth status from March 24, 1934 until July 4, 1946, when the United States recognized the independence and sovereignty of the Philippines (see: Commonwealth of the Philippines).

The term must be distinguished from its usage in the names of the U.S. states of Virginia, Massachusetts, Pennsylvania, and Kentucky, which officially describe themselves as "commonwealths" but hold the same legal and political status as other states of the Union.

Of the U.S. insular areas, the term was first used by Puerto Rico in 1952 as its formal name in English ("Commonwealth of Puerto Rico") since a strict translation of its name in Spanish would have been unacceptable to the U.S. Congress. The formal name in Spanish for Puerto Rico is "Estado Libre Asociado de Puerto Rico," which translates exactly into "Free Associated State of Puerto Rico." The name "Estado Libre Asociado" summarizes the aspirations of many of those who want to maintain and even "improve" the relationship with the U.S., with greater autonomy and perhaps sovereignty, albeit with a U.S. passport. It is noted that the Commonwealthers present their status as an association with the United States under common citizenship, common defense and common currency. As of November of 2004, roughly half of the voters appear to have a preference for Commonwealth, the other half being for statehood with the U.S. A small portion (roughly 3 percent) seems to back independence.