Khalaf Manshadi, owner of al-Manara newspaper, said Kuwait's Information Ministry informed him on Tuesday it had ended publication of the paper, which is distributed only in Iraq.
"They said the reason for the closure was that the newspaper criticised US policy in Iraq as well as US and British armies there. They said this harms Kuwait's relations with the United States and Britain," Manshadi said.
His paper has been printing only in Kuwait since July 2003.
Kuwaiti officials were not immediately available for comment.
US-allied Kuwait was the launchpad for the US-led 2003 war in Iraq and is host to as many as 30,000 American troops.
The Gulf Arab state is also a main transit route for foreign forces entering Iraq.