Confusion is common concerning the difference between the two main statuses held by people with long-term rights to live and work in the U.S.: lawful permanent residence (holding a green card) and U.S. citizenship. Let’s look at the similarities and differences.
For someone immigrating to the U.S. on a permanent basis, lawful permanent residence is usually the necessary first step. For example, people may become lawful permanent residents after being petitioned for (often called “sponsored”) by a spouse or close family member or an employer; after receiving refugee status or asylum; after winning the diversity visa lottery; or in various other categories. For more information, see Green Card Qualification.
In most cases, green card holders must wait some years before taking the next step and applying to become U.S. citizens, through a process called “naturalization.” Other ways that people can become U.S. citizens include by birth in the U.S., birth overseas to a U.S. citizen parent, and living in the U.S. as a child when when a parent naturalizes (described in Nolo's articles on acquiring or deriving citizenship through parents).
About the only way that someone can go straight from having no U.S. immigration status to being a U.S. citizen is by joining the the U.S. military, as described in U.S. Citizenship Rights for U.S. Military Personnel and Veterans.
A lawful permanent resident receives a photo identity card that is, literally, green. The card is evidence that he or she has the right to live and work in the U.S. on a permanent basis; to travel and return; and to petition for certain close family members to also receive green cards.
However, green card holders cannot do everything that U.S. citizens can. They cannot vote in U.S. elections.
And although they're called "permanent" residents, this status isn't always permanent. For example, they cannot remain outside the U.S. for unlimited amounts of time or make their home elsewhere—doing so will result in abandonment of their residency and refusal of their request to reenter the United States.
They can also lose their residency rights by failing to advise U.S. Citizenship and Immigration Services (USCIS) of changes in their address, committing crimes or acts of espionage or terrorism, or falling into some other ground of deportability.
Also, green card holders can’t always get the same assistance and benefits from the government that U.S.citizens can. Many federal programs impose a five-year waiting period before green card holders can start receiving benefits. (See What Public Benefits Can a Green Card Holder Receive?)
For these reasons, it is wise for permanent residents to apply for U.S. citizenship as soon as possible. For information on doing that, see Who Can Apply for U.S. Citizenship.
U.S. citizenship is the highest status someone can attain under U.S. immigration law. It means a truly permanent right to live in the United States. Citizens are not subject to the grounds of deportability that affect green card holders. The only way someone can take a former immigrant’s citizenship status away is if that person committed fraud in obtaining it in the first place. (See When U.S. Citizens Can Lose Their U.S. Citizenship.)
U.S. citizens can vote, and can petition for a longer list of foreign national family members to join them in the U.S. than permanent residents can—for example, unlike green card holders, they can petition for their parents (as immediate relatives), their married children, and their brothers and sisters (in the fourth preference category—it’s a long wait).