Secretary of State Hillary Rodham Clinton offered condolences to the family and friends of Khairy Ramadan Aly, who worked for almost two decades at the embassy in Egypt's capital.
The U.S. said there were conflicting reports on Aly's death. He disappeared on Jan. 28.
His family reported he was headed to find his missing son in Tahrir Square, where protesters have gathered for 17 days to demand that Egyptian President Hosni Mubarak step down. Aly appears to have been killed in a random act of violence outside the city center, before ever reaching the square.
Aly's family reported that he had three gunshot wounds. His son returned safely home sometime after Aly went searching for him.
In a statement, Clinton noted that many Egyptians were working alongside American colleagues at U.S. diplomatic posts in Cairo and Alexandria, despite the instability in the country.
"The United States condemns violence against civilians under any circumstances," Clinton said. "Abuses committed against those seeking to exercise basic freedoms must stop."