Directly from the Department of State website:
The proposed implementation timeline has two phases:
Beginning January 23, 2007, ALL persons, including U.S. citizens, traveling by air between the United States and Canada, Mexico, Central and South America, the Caribbean, and Bermuda will be required to present a valid passport, Air NEXUS card, or U.S. Coast Guard Merchant Mariner Document, or an Alien Registration Card, Form I-551, if applicable.
As early as January 1, 2008, ALL persons, including U.S. citizens, traveling between the U.S. and Canada, Mexico, Central and South America, the Caribbean, and Bermuda by land or sea (including ferries), may be required to present a valid passport or other documents as determined by the Department of Homeland Security. While recent legislative changes permit a later deadline, the Departments of State and Homeland Security are working to meet all requirements as soon as possible. Ample advance notice will be provided to enable the public to obtain passports or passport cards for land/sea entries.
The passport requirement does NOT apply to U.S. citizens traveling to or returning directly from a U.S. territory. U.S. citizens returning directly from a U.S. territory are not considered to have left the United States and do not need to present a passport. U.S. territories include the following: Guam, Puerto Rico, the U.S. Virgin Islands, American Samoa, Swains Island, and the Commonwealth of the Northern Mariana Islands.
