De facto Honduran leader Roberto Micheletti lifted an emergency decree Monday that had suspended some civil liberties and shut two media outlets loyal to ousted President Manuel Zelaya, Reuters reported.
"It is completely overturned," Micheletti told a news conference.
Micheletti was under international pressure to end the emergency measures as the Organization of American States tries this week to negotiate an end to a crisis triggered when Zelaya was toppled in a June coup.
Zelaya slipped back into the country two weeks ago and has taken refuge in the Brazilian embassy in Tegucigalpa with his wife and scores of followers. Troops and police in riot gear have ringed the mission to curb pro-Zelaya protests.
One pro-Zelaya radio station closed under the emergency regulations had continued broadcasting from a safe house via the Internet.
The post-coup standoff is Central America's worst crisis in years and has become a test for U.S. President Barack Obama after he promised a new era of engagement with Latin America.
Both Honduran leaders say they are ready for talks, but their key demands remain unchanged. Micheletti says Zelaya must face the courts and is resisting pressure to restore him to power, while Zelaya insists he be reinstated unconditionally.