The beginning of the 21st century saw modernization in the Army in full swing. Fort Hood made history when it was the first installation selected to privatize post housing under the residential communities initiative. Under this initiative, new housing units remodeled housing and community improvements will be added to the to the post.

The 4th Infantry Division played a significant role in FORSCOM and Fort Hood's Division Teaming; a major initiative to further integrate active and reserve components of America's Army and leverages mutual support of operational requirements and strengthens their ability to respond to the full spectrum of military operations.

As the Army transforms 4th ID maintained its balanced readiness. The fourth maintains the lead in developing and implementing new tactics, techniques and procedures for operations, which were successfully exercised during the 2001 Division Capstone Exercises.

During 2001, a new era was ushered into Fort Hood as security and the war on terrorism became the prime focus. Fort Hood transitioned from an open to a closed post with the help of Military Police from Reserve units. Military Police from the 89th MP Brigade and other units deployed to Guantanamo Bay, Cuba to guard Taliban detainees.

The 4003rd Garrison Support Unit played a big role by filling vacancies left by deploying units at Fort Hood. Fort Hood also has a key roll as a training base for mobilizing Reserve and National Guard units to support the Homeland Defense effort.