Islamic State fighters fired mortar rounds containing mustard agent at Kurdish peshmerga fighters in northern Iraq during clashes in August, the Ministry of Peshmerga Affairs, which oversees Kurdish armed forces there, said on Wednesday.
Blood samples taken from around 35 fighters who were exposed in the attack southwest of the regional capital Erbil, along with an examination of wounds, showed "signatures of sulfur mustard", the ministry said in a statement.
It did not say if any of the peshmerga had died as a result of the attack or how severely they had been wounded.
Mustard gas, which can burn skin and mucus tissue and cause severe respiratory problems, is banned under the Chemical Weapons Convention, an arms treaty intended to stop the use of chemical weapons.
The samples were sent to a laboratory outside of Iraq for analysis with the help of members of the "Global Coalition against ISIL," the statement said, citing an acronym for identifying Islamic State.
It also called on countries fighting Islamic State to give Kurdish peshmerga fighters equipment for protection against chemical attacks. The United States is among a handful of countries who are giving military assistance to Kurdish forces in northern Iraq.
The ministry's statement adds to a mounting body of evidence that Islamic State has a stockpile of chemical weapons inside Iraq.
Roughly 37 mortars fired in the attack detonated "releasing white smoke and a black liquid," according to the ministry statement.
Islamic State already has a broad arsenal of weapons and military vehicles that they seized from the Iraqi army. In January of this year, IS carried out an attack using "weaponized chlorine" and has used chemical weapons on at least four other occasions, the ministry statement said.
Islamic State has also been accused of using chemical weapons in neighboring Syria.
The director of the Organization for the Prohibition of Chemical Weapons, an international body that tracks the use of banned chemical weapons, expressed "serious concern" on Islamic State's use of chemical weapons in mid-August.
Iraq Kurds were the victim of a major chemical weapons attack by the Iraqi military under Saddam Hussein in 1988, which left thousands dead in the city of Halabja.