The collapse of the government in Sanaa means the United States has lost a reliable partner in its fight against al-Qaeda in Yemen with potentially dire consequences, experts say.
The result could mean an emboldened al-Qaeda on the Arabian Peninsula (Aqap), able to operate more freely amid political turmoil and without pressure from US-trained government forces.
"Terrorist groups thrive on chaos, and the threat to the West could well grow," said Daniel Benjamin, a former co-ordinator for counter-terrorism at the US State Department.
Yemen is arguably the most important front in America's struggle against Islamist extremists, given the dangerous track record of Aqap.
The group claimed responsibility for this month's deadly attack in Paris on satirical weekly Charlie Hebdo and has been linked to more than one attempt to blow up aircraft bound for the United States.
Washington has counted on the Yemeni Government to share intelligence on Aqap, support drone strikes against the group's leaders and permit the presence of dozens of US special operations forces.
US officials admit they are unsure what will happen after Abdrabuh Mansur Hadi, a crucial US ally, resigned as president amid a confrontation with Shi'ite militia.
"Yemen has been an important partner for counter-terrorism," a defence official said.
"They have not just given permission for US operations but taken their own action on the ground ... No one knows what comes next."
Officials were weighing up evacuation of the American embassy, as well as special operation forces advisers.
If a new government opted to scrap its collaboration with the Americans, Washington would have to consider taking "unilateral" military action against Aqap, he said.
The crisis had thrown the counter-terrorism effort in Yemen "into some disarray," said Adam Schiff, a Democrat on the House Intelligence Committee.
The prospect of conflict between Sunnis and Shi'ite Houthis "will only give a lot of comfort and free rein for al-Qaeda to have a resurgence in Yemen potentially," Schiff said.
It would be increasingly difficult to keep the US embassy open, and that would mean no more American military advisers, said former CIA officer Bruce Riedel.
Washington would have to rely on drone raids without assistance from local forces on the ground, or intelligence gleaned from captured militants, he said.
The US military and CIA have carried out more than 100 drone strikes in Yemen since 2009, as well as 15 cruise missile attacks, according to New America Foundation estimates.
Some experts said the Houthi militia that ousted the Western-backed government might opt to secretly co-operate with the Americans, as Houthis are enemies of Aqap.
But the Houthis are also hostile to the West.
"I think Aqap is going to be one of the beneficiaries of the unravelling of Yemen," Riedel predicted.