"Steven MacQueen, who was working for the [Afghan] Ministry of Rural Development and Rehabilitation, was killed last night," British embassy press officer Colin Ball said on Tuesday.
"The Afghan police are investigating the shooting. His next of kin have been informed and our thoughts are with the family," he added.
MacQueen, 41, had been working as the director of the World Bank-backed MicroFinance Investment and Support Facility for Afghanistan, a project to boost private investment in the war-torn country.
He was driving alone on a road flanked by the Dutch embassy and a United Nations guesthouse when we was killed by a single shot fired from another vehicle, a senior police official said on condition of anonymity.
"The attackers managed to escape the scene," he said.
The police official said Afghan police were investigating the incident and had taken the body to hospital for a post-mortem examination, but the reason behind the attack remained unclear.
Foreigners in Kabul have been put on guard after a series of incidents late last year which raised fears that Afghanistan could be hit by a wave of Iraq-style kidnappings and killings.