Iraqi security forces have tasted succes in fighting al-Qaeda in Babil
Iraqi forces have been handed control of security in the province of Babil by the US military.
It is the 12th of Iraq's 18 provinces to be handed back to Iraqis.
The move comes two days after clashes between militants and Sunni tribesmen in mainly Shia Babil, south of Baghdad, killed at least 15 people.
Babil has seen much sectarian violence, including a suicide attack in Hilla in March last year that left more than 100 Shia pilgrims dead.
The province includes a Sunni Muslim area which became known as the "Triangle of Death" because of the high number of attacks against US forces there.
Violence abated in part due to former Sunni rebels in Babil who joined so-called Awakening Councils and turned against al-Qaeda militants.
The previous province transferred to Iraqi security control was Anbar - once the centre of Iraq's Sunni insurgency - which was handed back in September.
At the handover ceremony in the provincial capital, Hilla, Iraqi national security advisor Muwaffaq al-Rubaie said more provinces will follow.
BABIL PROVINCE: KEY FACTS
Population: 1.3 million
Religion: Majority Shia
Area: 5,603km sq
Large US base at Babylon, a site of rich archaeological heritage
"I want to declare from Babil that Iraq will take over Wasit in the next few days and we hope to complete the transfer of the remaining provinces in the near future.
"Today the security forces of Babil are self-reliant and we are proud to take over Babil from US forces," he said.
The handover comes amid growing tension between the US and Baghdad over a draft agreement covering the long-term presence of US troops in Iraq.
On Wednesday, Iraqi government spokesman Ali al-Dabbagh described as "unwelcome" a warning by US military chief Mike Mullen of "major security losses" if Iraq does not pass the deal.
Military spokesman Brig Gen Qassim Atta said Iraqi forces were ready to handle security across all of the country's 18 provinces.
Iraq's cabinet has called for changes to the draft pact, which allows US forces to stay in Iraq after their UN mandate ends in December.