The town, with a population of some 200,000 people, mostly ethnic Shiite and Sunni Turkomen, was taken just before dawn, Mayor Abdulal Abdoul told The Associated Press.
The ethnic mix of Tal Afar, 420 kilometres northwest of Baghdad, raises the grim spectre of large-scale atrocities by Sunni militants of the al-Qaida-inspired Islamic State of Iraq and the Levant, or ISIL, who already claim to have killed hundreds of Shiites in areas they captured last week.
The local security force left the town before dawn, said Hadeer al-Abadi, who spoke to the AP as he prepared to head out of town with his family.
Local tribesmen who continued to fight later surrendered to the militants, he said.
"Residents are gripped by fear and most of them have already left the town to areas held by Kurdish security forces," said al-Abadi.
Security at the US Embassy in Baghdad was strengthened and some staff members were sent elsewhere in Iraq and to neighbouring Jordan, the State Department said yesterday.
The State Department also issued a travel warning for Iraq last night, which cautioned US citizens to avoid "all but essential travel to Iraq."
The warning said the Baghdad International Airport was "struck by mortar rounds and rockets" and that the international airport in Mosul, the country's second-largest city, has also been the target of militant assault.
However, a senior Baghdad airport official, Saad al-Khafagi, denied that the facility or surrounding areas have been hit. State-run Iraqiya television also denied the attack, quoting the Ministry of Transport.
