Cofer Black, the company's current vice chairman, was the Bush administration's top counter terrorism official when 9/11 occurred. In 2002, he famously stated: "There was before 9/11 and after 9/11. After 9/11, the gloves come off." Blackwater has become home to a significant number of former senior CIA and Pentagon officials. Robert Richer became the firm's Vice President of Intelligence immediately after he resigned his position as Associate Deputy Director of Operations in fall 2005. He is formerly the head of the CIA's Near East Division.

Blackwater's training facility, located on 7,000 acres in North Carolina, comprises several ranges, indoor, outdoor, urban reproductions, a man-made lake, and a driving track in Camden and Currituck counties. It is one of the largest firearms training facilities in the world. Company literature claims that the company runs "the largest privately owned firearms training facility in the world."

In November 2006 Blackwater USA announced it recently acquired an 80-acre (30 ha) facility 150 miles (240 km) west of Chicago, in Mount Carroll, Illinois to be called Blackwater North. That facility has been operational since April, 2007 and serves law enforcement agencies throughout the midwest.

Blackwater is also trying to open a facility in California for military and law enforcement training, in Potrero, San Diego County.

In 2003, Blackwater landed its first truly high-profile contract: guarding civilian Administrator L. Paul Bremer in Iraq, at the cost of $21 million for 11 months. Since June 2004, Blackwater has been paid more than $320 million out of a $1 billion, five-year State Department budget for the Worldwide Personal Protective Service, which protects U.S. officials and some foreign officials in conflict zones. In 2006, Blackwater won the remunerative contract to protect the U.S. embassy in Iraq, which is the largest American embassy in the world.

For work in Iraq, Blackwater has drawn contractors from their international pool of professionals, a database containing "21,000 former Special Forces troops, soldiers, and retired law enforcement agents," overall. For instance, Gary Jackson, the firm's president, has confirmed that Bosnians, Filipinos, and Chileans, "have been hired for tasks ranging from airport security to protecting Paul Bremer, the head of the Coalition Provisional Authority."

On March 31, 2004, Iraqi insurgents in Fallujah attacked a convoy containing four American private military contractors from Blackwater USA who were conducting delivery for food caterers ESS. The four armed contractors Scott Helvenston, Jerko Zovko, Wesley Batalona and Michael Teague, were attacked and killed with grenades and small arms fire. Their bodies were hung over a bridge crossing the Euphrates. In the fall of 2007, a congressional report found that Blackwater intentionally "delayed and impeded" investigations into the contractors' deaths.

Photos of the event were released to news agencies worldwide. The event led to a failed U.S. operation to occupy the city in the First Battle of Fallujah, and the later successful attempt seven months later in the Second Battle of Fallujah.

In April 2005 six Blackwater independent contractors were killed in Iraq when their Mi-8 helicopter was shot down. Also killed were three Bulgarian crewmembers and two Fijian gunners. Initial reports indicate the helicopter was shot down by rocket propelled grenades.

On January 23, 2007, five Blackwater contractors were killed in Iraq when their Hughes H-6 helicopter was shot down. The incident happened in Baghdad, Haifa Street. The crash site was secured by a Personal Security Detail Platoon, callsign "Jester" from 1/26 Infantry, 1st Infantry Division. Three Iraqi insurgent groups claimed responsibility for shooting down the helicopter, however, this has not been confirmed by the US. A US defense official has confirmed that four of the five killed were shot execution style in the back of the head, but did not know whether the four had survived the crash.

According to the State Department, on December 24, 2006, a Blackwater employee shot and killed a security guard working for the Iraqi vice-president. In late May 2007, Blackwater contractors, "opened fire on the streets of Baghdad twice in two days... and one of the incidents provoked a standoff between the security contractors and Iraqi Interior Ministry commandos, U.S. and Iraqi officials said." And on May 30, 2007, Blackwater employees shot an Iraqi civilian deemed to have been "driving too close" to a State Department convoy being escorted by Blackwater contractors.

On September 17, 2007, a Blackwater team was escorting a convoy of US State Department vehicles en route to a meeting in western Baghdad with United States Agency for International Development officials.

According to an Iraqi investigation into the events at Nissor Square, as the convoy drew close to Nissor Square, a car, driving very slowly, on the wrong side of the road, ignored a police officer's whistle to clear a path for the convoy. Shortly after this, the security team fired warning shots, and then lethal fire. Sound bombs were also fired. Iraqi Army soldiers, mistaking the sound-bombs for explosions, opened fire at the Blackwater team, to which the Blackwater team responded.

On September 19, the United States suspended all land travel by U.S. diplomats and other civilian officials in Iraq outside Baghdad's heavily fortified Green Zone as a result of public outrage over the alleged killing of civilians by Blackwater employees. The order confines most Americans to a 3.5-square-mile area in the center of the city so that they are unable to visit other areas without travelling in a helicopter. The order did not say when the suspension would expire.

Unlike many deaths blamed on foreign contractors, this shooting took place in downtown Baghdad, an area with dozens of witnesses. "We see the security firms ... doing whatever they want in the streets. They beat citizens and scorn them," Baghdad resident Halim Mashkoor claimed to AP Television News. He asked, "if such a thing happened in America or Britain, would the American president or American citizens accept it?" Hasan Jaber Salman, one of the wounded and an Iraqi lawyer, charged that "no one did anything to provoke Blackwater" and that "as we turned back they opened fire at all cars from behind" After a group of Iraqi ministers backed the Iraqi Interior Ministry's decision to shut down Blackwater USA's operations in Iraq, Iraqi Prime Minister Nuri al-Maliki called on the U.S. government to end its contract with Blackwater USA as well.

On September 21, CNN reported that Blackwater would resume normal operations the following day. The State Department has announced an American-Iraqi joint commission to investigate both the shooting and the use of private security contractors as a broader issue. The committee will be co-chaired by Abd al Qadir, the Iraqi Minister of Defense and Patricia A. Butenis, the Charge d'Affaires of the U.S. Embassy in Iraq.

On September 22, Iraqi investigators announded that they have a videotape that shows Blackwater USA contractors opening fire against civilians without provocation. Maj. Gen. Abdul-Karim Khalaf, an Interior Ministry spokesman, said Iraqi authorities had completed their investigation into the shooting and concluded that Blackwater guards were responsible for the deaths. Khalaf said the report had been "sent to the judiciary". Under Iraqi law, an investigating judge decides whether there is enough evidence for a trial. Khalaf also said the ministry was looking into six other fatal shootings involving Blackwater.

On September 24, the Iraqi Ministry of the Interior announced it would file criminal charges against the Blackwater staff involved in the shooting, although it is unclear how some of them will be brought to trial. “The murder of citizens in cold blood in al-Nissour area by the Blackwater is considered a terrorist action against the civilians just like any other terrorist operations,” a preliminary report of the findings says. A senior aide to al-Maliki said that three of the Blackwater guards were Iraqis and could be subject to prosecution. The aide also said that the Iraqi government was pushing for an apology, compensation for victims or their families and for the guards involved in the shooting to be held "accountable." US Secretary of Defense Robert Gates testified before Congress that the Pentagon has sufficient legal authority to control its contractors, but that commanders lack sufficient "means and resources" to exercise adequate oversight.