When mailing a letter to a destination in the United States, its possessions/territories, or to US military personnel, the United States Postal Service asks that the official two letter abbreviation be used (capitalized and no periods). This helps speed along the mail and allows the USPS automate the piece.
It should be part of the bottom line of the address:
Hell MI 48169
Note: the city, state, and zip code should be on a single line and there is no need for the comma following the city. Ideally, the whole address should be printed and capitalized for the machines to better read it. Avoid cursive.
States and the District of Columbia:
- American Samoa (unincorporated and unorganized territory) - AS
- Armed Forces:
- Armed Forces Africa - AE
- Armed Forces Americas (except Canada) - AA
- Armed Forces Canada - AE
- Armed Forces Europe - AE
- Armed Forces Middle East - AE
- Armed Forces Pacific - AP
- Army Post Office (for military without a "permanent" address; serves army and air force) - APO
- Fleet Post Office (see above; serves marines and navy) - FPO
- Federated States of Micronesia (constitutional government in free association with the US) - FM
- Guam (organized, unincorporated territory) - GU
- Marshall Islands (constitutional government in free association with the US) - MH
- Northen Mariana Islands (commonwealth in political union with the US) - MP
- Palau (constitutional government in free association with the US) -PW
- Puerto Rico (commonwealth associated with the US) -PR
- U.S. Virgin Islands (organized, unincorporated territory of the US) -VI
These destinations are still considered Domestic mail and the first class postage is the same as if one were sending a letter from, say, Illinois (IL) to Ohio (OH). Like domestic mail (for the fifty states), it will generally hit the three day target for delivery but no guarentees.
Since almost all Armed Forces mail goes outside of the US, it is treated like other international mail in that any package over one pound requires a customs declaration form filled out with the contents, weight, address of origin and destination, signature, and needs to be handed over the counter for a postal clerk to "bump" (stamp a postmark).
Sources: almost two years working for the USPS (as a clerk and mailhandler), about five years working for a bulk mailing service, www.usps.gov, CIA World Factbook (status on non-states) www.cia.gov/cia/publications/factbook
In my time working at the PO, the most common errors in the abbreviations occurred with Arkansas (AR) which often came as AK (Alaska) or AS (American Samoa) and Alaska (AK) abbreviated as AS or AL. Another problem arises because of the number of states beginning with "M": Maine (ME), Maryland (MD), Massachusetts (MA), Michigan (MI), Minnesota (MN), Mississippi (MS), Missouri (MO), Montana (MT). Usually what would happen is the person would think Maine and Mississippi were abbreviated by the first two letters. Fortunately for people who do that, the primary information for sorting is the zip code, itself. If the zip is correct, an incorrect or misspelled city or state is less likely to delay the mail.
(Other writeups assimilated and new information added: 5 July 2003)