The allegations, deemed "plausible" by a US official, follow claims in March by the autonomous Kurdish government in northern Iraq which said it had evidence that the jihadist group used chlorine in a car bomb attack on January 23.
"We have indications that there was an attack with chemical weapons" against Kurdish peshmerga fighters that left many suffering from "respiratory irritation", a German defence ministry spokesman told AFP yesterday.
A senior official from the peshmerga told AFP the attack happened this week and wounded several dozen fighters.
The defence ministry in Germany, which is providing arms and weapons training to the Kurdish forces, said that "American and Iraqi specialists from Baghdad are on their way to find out what happened".
A ministry spokesman had said earlier "there was a chemical weapons attack" near Arbil, the capital of Iraq's Kurdish region.
A second ministry spokesman later stressed that German forces were not present during the attack, but that "we have indications that there was an attack with chemical weapons".
"German soldiers were not affected or in danger" during the reported attack, the spokesman said. "The protection of our soldiers in northern Iraq is already at the highest level."
A US official, speaking on condition of anonymity, said on Thursday that claims IS had used chemical weapons on the Kurds were "plausible".
The Pentagon, meanwhile, said it was "seeking additional information" about the alleged attack.
"We continue to take these and all allegations of chemical weapons use very seriously," said Pentagon spokesman Navy Captain Jeff Davis.
