The nullification crisis was resolved when Congress revised the tariff that had caused South Carolina to declare nullification; then, the state was able to accept the compromise without losing their respect and pride. However, the nullification crisis would not be fully resolved until the Civil War, when the national government left dual federalism and entered into cooperative federalism, thereby limiting the state's power to challenge the national government's authority.
The nullification crisis came about when Congress passed a high tariff on imports of British textiles. This upset the Southerners, since the British needed fewer amounts of their raw cotton. The Southerners wanted to see a change, and expected Vice President John Calhoun to do something, since he was from South Carolina.
Calhoun worked with South Carolina and issued "The Ordinance of Nullification" in 1832. It stated that a state could nullify a law in its territory if the state did not agree with the law, regardless of whether or not it was a federal law. In Congress, Henry Clay put a new tariff bill through during the same year, which was intended to satisfy the southerners in some regards, but Southerners felt the tariff was still too high.
President Jackson crushed the nullification by asking Congress to create legislation that would allow him to take federal troops into South Carolina to stop the nullification. Luckily, Henry Clay's revisions allowed Southerners to withdraw from nullification without feeling a loss of pride.