Announcing the departure of General John Allen, who steps down after a year marked by setbacks, policy reversals and increasing regional chaos, Obama described McGurk as "one of my most trusted advisers on Iraq."
Allen played a key role in trying to hold together the disparate 65-member coalition who have vowed to roll back Islamic State's territorial gains.
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The task has only become more complex since Russia and Iran have intervened to prop up the Syrian government and deepen ties with Baghdad.
McGurk had most recently been Allen's deputy, focusing largely on efforts with Sunni tribal leaders and the Iraqi government to take back Ramadi.
It is unclear if his appointment signals a rethink in policy, which critics say has floundered in recent months.
Obama recently scrapped a $600 million mission to train Syrian opposition fighters to take on Islamic State.
The group controls swathes of northern Syria and is within striking distance of Baghdad.
Yesterday, a serviceman became the first American to be killed in action since the fight began in Iraq in June 2014.
He was in a contingent of Kurdish and US forces that stormed a prison in northern Iraq, freeing some 70 captives who were facing imminent execution, the Pentagon said.
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