The Northwest Ordinance enacted July 13, 1787, was an organic act of the Congress of the Confederation of the United States. It created the Northwest Territory, the first organized territory of the United States, from lands beyond the Appalachian Mountains, between British North America and the Great Lakes to the north and the Ohio River to the south. The upper Mississippi River formed the territory's western boundary.

Considered one of the most important legislative acts of the Confederation Congress,[3] it established the precedent by which the Federal government would be sovereign and expand westward with the admission of new states, rather than with the expansion of existing states and their established sovereignty under the Articles of Confederation. It also set legislative precedent with regard to American public domain lands.[4] The U.S. Supreme Court recognized the authority of the Northwest Ordinance of 1789 within the applicable Northwest Territory as constitutional in Strader v. Graham,[5] but did not extend the Ordinance to cover the respective states once they were admitted to the Union.

The prohibition of slavery in the territory had the practical effect of establishing the Ohio River as the geographic divide between slave states and free states from the Appalachian Mountains to the Mississippi River (an extension of the Mason–Dixon line). It also helped set the stage for later political conflicts over slavery at the federal level in the 19th century until the Civil War.

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