Army officially accepted an invitation to the bowl on November 30, 2010. The Black Knights had a contingency agreement with the AF Bowl to compete in the game if Conference USA or the Mountain West Conference could not fill their bowl obligation. Since TCU was invited to a BCS Bowl and the Mountain West only had 4 other bowl eligible teams to fill 5 bowl games, the spot opened up for Army to be invited. For Army, this was their first bowl appearance since 1996 when they played in the Independence Bowl against Auburn. The 2010 game was the first time Army played in the Armed Forces Bowl.
SMU made their second straight bowl appearance after not appearing in a bowl game since 1984, before the program was devastated by scandal. The Mustangs entered the game with a 7-6 record and were Co-Champions of Conference USA's West Division. SMU defeated Nevada in last season's Hawaiʻi Bowl by a score of 45-10. This was SMU's first appearance in the Armed Forces Bowl. The game was played at the Mustangs' home stadium after the contest was moved to Gerald Ford Stadium due to construction on TCU's Amon G. Carter Stadium.
Although both Army and SMU have been members of Conference USA, the teams have only played each other two previous times. This is mainly because their tenures in the Conference have not overlapped. Army was a member of the conference from 1997-2004 while SMU is a current member who started conference membership in 2005. Army has won the previous two meetings with the Black Knights winning a 14–13 decision at West Point in 1928 and picking up a 24–6 win at SMU in 1967.