Peshmerga fighters, the security forces of Iraq's autonomous Kurdish north, swept into Kirkuk after the army abandoned its posts there, a peshmerga spokesman said.
Iraqi Prime Minister Nuri al-Maliki secretly asked US President Barack Obama's administration to consider airstrikes against militant staging areas as the threat from Sunni insurgents mounted last month, the New York Times reported on Wednesday, citing US and Iraqi officials.
Kurds have long dreamed of taking Kirkuk, a city with huge oil reserves just outside their autonomous region, which they regard as their historical capital.
The swift move by their highly organized security forces demonstrates how this week's sudden advance by fighters of the Al Qaeda offshoot Islamic State of Iraq and the Levant (ISIL) has redrawn Iraq's map.
Since Tuesday, black clad ISIL fighters have seized Iraq's second biggest city Mosul and Tikrit, hometown of former dictator Saddam Hussein, as well as other towns and cities north of Baghdad. They continued their lightning advance on Thursday, moving into towns just an hour's drive from the capital.
The army of the Shi'ite-led government in Baghdad has essentially fled in the face of the onslaught, abandoning buildings and weapons to the fighters who aim to create a strict Sunni Caliphate on both sides of the Iraq-Syria frontier.
Security and police sources said militants now controlled parts of the small town of Udhaim, 90 km (60 miles) north of Baghdad, after most of the army troops left their positions and withdrew towards the nearby town of Khalis.
In Tikrit, militants have set up military councils to run the towns they captured, residents said.
Security was stepped up in Baghdad to prevent the Sunni militants from reaching the capital, which is itself divided into Sunni and Shi'ite neighborhoods and saw ferocious sectarian street fighting in 2006-2007 under US occupation.
The million-strong Iraqi army, trained by the United States at a cost of nearly $25 billion, suffers from low morale. Its effectiveness is hurt by the view in Sunni areas that it represents the hostile interests of the Shi'ite-led government.
In Washington, an Obama administration official said the government of Iraqi Prime Minister Nuri al-Maliki had in the past sought US air strikes against ISIL positions. The White House suggested such strikes were not being considered and said Washington's main focus now is on building up government forces.
About 500,000 Iraqis have fled Mosul, home to 2 million people, and the surrounding province, many seeking safety in autonomous Kurdistan, a region that has prospered while patrolled by the powerful peshmerga, avoiding the violence that has plagued the rest of Iraq since the US invasion in 2003.
The Kurdish capture of Kirkuk instantly overturns the fragile balance of power that has held Iraq together as a state since Saddam's fall.
Maliki described the fall of Mosul as a "conspiracy" and said the security forces who had abandoned their posts would be punished. He also said Iraqis were volunteering in several provinces to join army brigades to fight ISIL.
In a statement on its Twitter account, ISIL said it had taken Mosul as part of a plan "to conquer the entire state and cleanse it from the apostates", referring to the province of Nineveh of which the city is the capital.
Militants were reported to have executed soldiers and policemen after their seizure of some towns.
In Mosul, 80 Turkish citizens were being held hostage by ISIL, the foreign ministry in Ankara said, after its consulate there was overrun. Turkey threatened to retaliate if any of the group, which included Special Forces soldiers, diplomats and children, were harmed.
ISIL, led by Abu Bakr al-Baghdadi, broke with al Qaeda's international leader, Osama bin Laden's former lieutenant Ayman al-Zawahri, and has clashed with al Qaeda fighters in Syria.
In Iraq, it has carried out endless bombings against Shi'ite civilians, killing hundreds a month.
The violence in Iraq raised fears about the outlook for oil supplies, with futures prices in New York pushed higher towards $110 a barrel.