The IS took over the Maktab Khalid area, southwest of Kirkuk following heavy fighting with Kurds, killing Peshmerga Brig. Gen. Shirko Fateh and several troops.
Fateh was the highest-ranking operational commander of the Peshmerga Kirkuk brigade.
Local authorities told CNN that heavily armed militants also attacked a deserted hotel in central Kirkuk, used by police as a headquarters.
A curfew was imposed in Kirkuk Friday, until further notice.
The IS militant organization has taken control of large territories in northern Iraq, particularly in the oil-rich areas of Mosul, a source of revenue.
The extremist group, known for its human rights atrocities, began fighting the Syrian government in 2012. The IS later expanded operations to Iraq, declaring a caliphate on territories under the group’s control.
The Peshmerga fighters have been actively fighting the radical Islamist group, aided by airstrikes performed by the US-led coalition on IS targets in both countries.