"The hard part begins now," said Bruce Riedel, a former CIA officer and foreign policy expert at the Brookings Institution.
Egypt has been one of America's strongest allies in the Middle East and Mubarak has played a major role in maintaining peace with Israel. The army said it would respect Egypt's peace treaty with Israel until a new government is established.
Riedel said the U.S. must maintain a strong presence in Egypt's transition by "building a broad coalition that includes the army and the politicians that can prepare for elections and reboot the economy while avoiding quarreling with Israel."
But how this process will unfold is unknown. The high military council now overseeing the country has said that replacing the Egyptian constitution is not part of its mandate.
"This is a volatile region of the world," said White House Press Secretary Robert Gibbs. "We don't know the ultimate outcome of what free and fair elections will be. We don't have a sense of who that next leader will be ... a lot has yet to be determined."
A government-for-the-taking in Egypt has some officials wondering whether the Muslim Brotherhood or al Qaeda could manager a takeover in Egypt.
"I'm very deeply concerned about the Muslim Brotherhood. I don't think they're moderate, but extremists," Sen. John McCain, R-Ariz, said.
Former CIA Director Michael Hayden said it isn't likely that terrorist groups would rise to power, but said "it's a danger."
"Well, they certainly take some celebration that someone who has been a long-time friend of the United States is going through these kinds of circumstances," he told CNN. "I think that would be heartening to them."
"It's hard to imagine the Egyptian government that would be more supportive of peace with Israel, more supportive of our objectives with regard to the Palestinians, more supportive of our world view with regard to al Qaeda than the Mubarak has been," Hayden said.
As events unfold in Egypt, the U.S. will need push democratic reforms in Iraq, as well as help Jordan, Saudi Arabia and other Persian Gulf monarchies hold the line against Islamist extremists.
Obama phoned the prime minister of Turkey and King Abdullah II in Jordan on Saturday to assure them a democracy in Egypt "will bring more -- not less -- stability to the region," according to the White House. He said the U.S. will provide Egypt with financial support during the transition.
The alternative is stark. Since unrest flared in the region last month, the theocracy in Iran has been executing one person every nine hours, by the Wall Street Journal's estimate, prompting many middle-class Iranians to stay home rather than protest in the streets.