It will now allow the import of beef from cattle up to 30 months old.
Japan banned US beef imports in 2003 after the outbreak of mad cow disease. It restarted imports in 2006, but only from cattle less than 20 months of age.
US officials said the move was likely to boost US beef exports to Japan by "hundreds of millions" of dollars.
Ron Kirk, the US trade representative said the decision by Japan was "great news for American ranchers and beef companies".
Japan has also eased restrictions on beef imports from Canada, France and the Netherlands.
The new rules will take effect from 1 February.
Before the ban in 2003, Japan was one of the biggest markets for US beef exports.
However, the ban resulted in other beef exporting countries such as Australia increasing their presence in Japan.
Since the lifting of the ban in 2006, US firms have been trying to regain their share of the Japanese market.
They have achieved some success and US exports to Japan have been rising. However, shipments are yet to reach the levels seen before 2003.
"This move is an important step forward in paving the way toward greater export opportunities to one of our largest export markets," said J D Alexander, president of the National Cattlemen's Beef Association.
However, some analysts were sceptical about whether the easing of restrictions would have an immediate impact on US beef exports.
"Australia is not just going to give up the market share they've gained," said Lee Schulz, a livestock economist at Iowa State University.
Japan has opened the door for increased imports of beef from the US, as it eased restrictions that have been in place for almost a decade.