On July 18, 1946, The New York Times reported that Army fiscal offices had “transferred to the United States $35,000,000 more than the entire occupation [had] been paid.” U.S. Army officials eventually discovered that the discrepancy between the amount the entire occupation force had been paid and the total amount servicemen had remitted home was the result of American soldiers illegally selling U.S. luxury goods, especially cigarettes, chocolate, and gum. The Supreme Commander for the Allied Powers’ (SCAP) Legal Section concluded that such black market transactions violated the Trading with the Enemy Act and U.S. Army regulations. Despite numerous anti-black market measures, the occupation government was ultimately unable to stop the diversion of U.S. merchandise into the black market. In this paper, I examine the development of the black market in U.S. military goods during the early postwar period. Rather than viewing the occupation from the perspective of officials and policymakers, I instead focus on the interaction between U.S. servicemen and Japanese citizens on the black market. The illicit activities between these two groups and SCAP’s efforts to eradicate black marketeering shows that these parties often had competing interests. The black market also provided an opportunity for Japanese civilians to experience American material culture during a time of widespread scarcity. I also hope to challenge the traditional narrative of a decline in the postwar black market economy by showing that the black market in U.S. goods continued to be an issue until around the mid-1950s in many parts of Japan.