US Secretary of State Colin Powell on Wednesday authorised the increase for information leading to the Jordanian national's arrest or conviction.
The reward for Zarqawi's capture is now the same as for al-Qaida chief Usama bin Ladin.
"Abu Musab al-Zarqawi has had a long-standing connection to the senior leadership of al-Qaida," a State Department statement said.
"His organisation has committed numerous atrocities in Iraq in recent months, including the barbaric murder of American citizen Nick Beg," it added.
The US, the statement said, was determined to bring al-Zarqawi to justice.
Iraqi police said this week they were holding a man who resembled him, but the US military quickly refuted the claim.
US-led forces in Iraq have blamed al-Zarqawi for at least 25 attacks in Iraq, including the 2 March bombings in Karbala and Baghdad that killed some 170 people.
The US military has also accused al-Zarqawi of marshalling resources and masterminding attacks waged by loyalists of deposed Iraqi leader Saddam Hussein.
Those with information on al-Zarqawi's whereabouts were urged to contact the US embassy in Baghdad, any US military commander or other US officials in Iraq or any US embassy.