The bombing of the 747 aircraft bound for John F. Kennedy airport killed 270 people; many were from the tri-state area.
That follows claims from some ex-Libyan officials that Gadhafi personally ordered the airline attack.
Clinton tells Congress on Tuesday that she will ask the FBI and Justice Department to look into the matter in response to lawmakers' requests.
She noted that some Libyan officials who have defected in recent weeks have said Gadhafi gave the instructions to blow up Pan Am flight 103.
The U.S. has considered Pan Am 103 a closed case since a former Libyan intelligence officer was convicted of the bombing and Libya had paid compensation to families of the victims.