The body of Shaikh Abd al-Salam Abd al-Husain al-Maliki, who was Sadr's representative in the southern neighbourhood of Al-Shaab, was found on Sunday morning in the southeast Baghdad neighbourhood of Zayuna.
His death comes amid a spate of assassinations of religious political leaders across the country in the run-up to parliamentary elections on 15 December.
Al-Sadr, who has massive support among poor and disaffected Shia in Baghdad slums, as well as across the south, has become a key negotiator in Iraq.
US forces also reported a roadside bomb attack on one of its convoys in Khadra, a neighbourhood in western Baghdad.
Master Sergeant David Abrams, a military spokesman, said: "It looks like there were two wounded who were taken to a nearby medical treatment facility."
Three members of the Iraqi security forces, including a police lieutenant colonel, were killed in other incidents on Sunday morning, police said.