"We no longer consider them a security threat to the coalition," said Colonel Jill Morgenthaler.
She said a total of 494 prisoners, picked up in security operations, were freed on Tuesday, 272 of them from Abu Ghraib prison on the western edge of Baghdad. Abu Ghraib is one of the largest US-run prisons in Iraq and was a notorious centre under former president Saddam Hussein.
Morgenthaler could not give specific details on how long the people had been held in jail, but she said the average term was three to six months.
According to a US-occupation forces' estimate, about 8000 Iraqis are being held in the country's jails because they are considered a "security threat".
Two days ago, 168 prisoners were also released from the Abu Ghraib prison, said Lieutenant Colonel Craig Essick. He estimated there were between 5500 and 6000 detainees at the prison.
Human rights groups have complained that many detainees have been held in squalid conditions and that some of them have been mistreated.
The International Committee of the Red Cross (ICRC) says that between March and December 2003, its delegates visited and registered the identities "of some 10,200 prisoners of war and civilians deprived of freedom" held by occupation forces and protected by the Geneva Conventions.