The attack came as the United Nations said that fighting with IS in northern Iraq could displace another 30,000 people, adding to millions who have already fled their homes.
And in Baghdad, throngs of Shiite pilgrims braved the threat of bombings by IS, which have killed dozens of people in recent days, to take part in a major annual religious commemoration.
The fighter from the special operations force was at least the third coalition member killed by enemy fire in Iraq since IS overran swathes of the country in 2014.
Pentagon spokesman Peter Cook said the death occurred during an IS attack on a peshmerga position north of Iraq's jihadist-held second city Mosul.
A US defence official said the US SEAL's death as the result of "an orchestrated attack with shots and multiple IEDs (bombs) going off."
US Defence Secretary Ashton Carter said from Germany: "Our thoughts and prayers are with that service member's family."
A coalition military official said on condition of anonymity that the service member was killed at 9:30 am (0630 GMT) by "direct fire" after "enemy forces penetrated" the Kurdish peshmerga forces' line.
IS attacked the peshmerga in multiple areas of northern Iraq today in an attempt to "thwart the plan to liberate Mosul," said Jabbar Yawar, the secretary general of the autonomous Kurdish region's peshmerga ministry.
Iraq's Joint Operations Command said IS overran the Tal Asquf area and that the group was using suicide bombers in the ongoing fighting.
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