The allegations, deemed "plausible" by a US official, follow claims in March by the autonomous Kurdish government in northern Iraq which said it had evidence that the terrorist group used chlorine in a car bomb attack on January 23.
"We have indications that there was an attack with chemical weapons" against Kurdish peshmerga fighters that left many suffering from "respiratory irritation", a German Defense Ministry spokesman told AFP.
A senior peshmerga official said the attack took place Tuesday, injuring several dozen fighters.
The Wall Street Journal cited US officials as saying they believe the attack used mustard gas, which may have come from stockpiles of banned poisons that Syrian President Bashar al-Assad was forced to get rid of in 2013.
The German Defense Ministry, which is providing arms and weapons training to the Kurdish forces, said that "American and Iraqi specialists from Baghdad are on their way to find out what happened".
A US official, speaking on condition of anonymity, said claims the ISIL had used chemical weapons on the Kurds were "plausible".
The Pentagon, meanwhile, said it was "seeking additional information" about the alleged attack.
"We continue to take these and all allegations of chemical weapons use very seriously," said Pentagon spokesman Navy Captain Jeff Davis.