Capt. Rogelio "Roger" Maynulet, a 30-year-old from Chicago, stood at attention as the verdict was read.
The court was to reconvene later Thursday to consider Maynulet's sentence. The charge — assault with intent to commit voluntary manslaughter — carries a maximum of 10 years in prison.
Prosecutors had sought a conviction on a more serious charge of assault with intent to commit murder that carried a 20-year maximum.
Maynulet told the court Wednesday that his shooting of an unarmed Iraqi wounded in a chase was "honorable" and "the right thing to do."
He was found guilty in the May 21, 2004, killing near Kufa, south of Baghdad. He had pleaded not guilty.
Taking the stand for the first time Wednesday, Maynulet described his company's mission and the events that led him to fire twice upon the Iraqi, maintaining that the man was too badly injured to survive.
"He was in a state that I didn't think was dignified — I had to put him out of his misery," Maynulet said. He argued that the killing "was the right thing to do, it was the honorable thing to do."
Prosecutors at the court-martial said Maynulet violated military rules of engagement by shooting an Iraqi who was wounded and unarmed.
Maynulet's 1st Armored Division tank company had been on patrol near Kufa when it was alerted to a car thought to be carrying a driver for radical cleric Muqtada al-Sadr and another militiaman loyal to the Shiite cleric.
They chased the vehicle and fired at it, wounding both the passenger, who fled and was later apprehended, and the driver. The killing was filmed by a U.S. drone surveillance aircraft.
Maynulet said the company's medic, Sgt. Thomas Cassady, had told him: "He's gone, there's nothing we can do." He said he wouldn't question the expertise of his medic.
An Army neurosurgeon, Richard Gullock, testified that it was unclear from the surveillance footage whether the driver was alive or dead at the time of the shooting. In the video, the man appeared to be waving his right arm before the first shot.
"I am aware there can be similar movements in someone who can be considered clinically brain dead," Gullock said.
However, a second neurosurgeon, Lt Col. Rocco Armonda of the Walter Reed Medical Center in Washington, countered that the pattern of the man's movements in the video "indicate he was alive."
Maynulet appeared relaxed and spoke confidently as he testified, recounting the events in great detail.
Questions from the six-member panel — the equivalent of a civilian jury — focused on whether Maynulet tried to hide his actions by failing to report the shooting at the end of the day.
Maynulet said that he discussed the shooting in a debriefing that immediately followed the mission.
Asked directly if he had tried to hide the killing or cover it up, Maynulet replied, "No, not at all."
He further testified that, as company commander, he had more important priorities on the high-profile mission than saving the Iraqi, including searching for two escaped passengers and maintaining the safety of his men.
He testified that he was reluctant to expend limited first aid resources on a man he had been told would die anyway.
Iraq's interim deputy defense minister, Ziad Cattan, testified later Wednesday that he had worked with Maynulet when the soldier was stationed in Baghdad and had contact with Iraqi officials.
Cattan, a district council chairman at the time, described him as "a good soldier and a good officer." Asked about Maynulet's attitude toward Iraqis, Cattan replied that "he is very compassionate."
Maynulet's lawyers have argued that his actions were in line with the Geneva Conventions on the code of war. His command was suspended May 25, but he has remained with his Wiesbaden-based unit.
The U.S. military has referred to the Iraqi driver only as an "unidentified paramilitary member," but relatives named him as Karim Hassan, 36. The family does not dispute that he was working for al-Sadr.