On February 24, 1925, President Calvin Coolidge appointed Houghton as the U.S. Ambassador to Great Britain. Houghton assumed the post on April 6, 1925, and served until April 27, 1929. Houghton's service in both Germany and England gave him a unique ability to address the issue of the war reparations Germany owed to its World War I opponents, England being one of them. Houghton laid some of the groundwork for the Dawes Plan, named after then U.S. Vice President Charles G. Dawes, who would be Houghton's successor as Ambassador to Great Britain.