Reachability analysis of finite state machines is essential to many computer-aided design applications. We present new techniques to improve both approximate and exact reachability analysis using don't cares. First, we propose an iterative approximate reachability analysis technique in which don't care sets derived from previous iterations are used in subsequent iterations for better approximation. Second, we propose new techniques to use the final approximation to enhance the capability and efficiency of exact reachability analysis. Experimental results show that the new techniques can improve reachability analysis significantly.