General Qasem Soleimani, the head of the Iranian Revolutionary Guards' elite Quds Force, has been killed by US forces in Iraq.
The Pentagon confirmed he was killed "at the direction of the president".
It comes after reports of a strike at Baghdad's international airport, which is said to have killed a number of people.
Iran's Revolutionary Guards also confirmed Gen Soleimani was dead, blaming an attack by US helicopters.
They also said Iraqi militia leader Abu Mahdi al-Muhandis had been killed.
"At the direction of the President, the US military has taken decisive defensive action to protect US personnel abroad by killing Qasem Soleimani," a Pentagon statement said.
"This strike was aimed at deterring future Iranian attack plans. The United States will continue to take all necessary action to protect our people and our interests wherever they are around the world."
Reports also suggest that a number of Iraq militia heads have been detained by US forces in Baghdad, although this is unconfirmed.
The strike comes days after protesters surrounded the US embassy in Baghdad, clashing with US forces at the scene.
US defence secretary Mark Esper said late on Thursday that the US would not accept attacks against its personnel in the region, blaming Iran for the violence at the embassy.
"Attacks against us will be met with responses in the time, manner, and place of our choosing," a statement read. "We urge the Iranian regime to end their malign activities."
Who was Qasem Soleimani?
Since 1998, Maj Gen Qasem Soleimani has led Iran's Quds Force - an elite unit in Iran's Revolutionary Guards which handles clandestine operations abroad.
In that position Gen Soleimani played a key role bolstering Bashar al-Assad's Iranian-supported government in the Syrian Civil War, and in the fight against the Islamic State (IS) group in Iraq.
Gen Soleimani was a hugely significant figure in the Iranian regime. His Quds Force reported directly to Supreme Leader Ayatollah Ali Khamenei.
He first came to prominence in his country serving in the Iran-Iraq War in the 1980s.
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