Gunmen seized control of Sulaiman Bek, a town north of Baghdad, following deadly fighting with Iraqi security forces on Wednesday, officials said.
Security forces have completely withdrawn from the area, which is now under the control of the gunmen, Shalal Abdul Baban, a local administrative official responsible for the area, told AFP.
Niyazi Maamar Oghlu, a member of the provincial council in Salaheddin province, where Sulaiman Bek is located, also said authorities had lost control of the town.
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Both officials said a strategic road between Baghdad and Tuz Khurmatu, a town to the north of Sulaiman Bek, had been cut.
Clashes between security forces and protesters near Hawijah, in northern Iraq, left 53 people dead, and sparked a wave of revenge attacks in which dozens more have died.
Protesters have taken to the streets in Sunni-majority areas for more than four months, calling for the resignation of Prime Minister Nuri al-Maliki and decrying the alleged targeting of their minority community by the Shiite-led authorities.
The wave of violence that began on Tuesday is the deadliest to date linked to the protests.