Taisir Najah al-Mashhadani, a member of the Iraqi Accordance Front, the largest parliamentary bloc of the Sunni community, was taken from near her home on Saturday morning.
Al-Mashhadani is the first member of Iraq's parliament to be kidnapped since the December elections. Members of previous assemblies have been assassinated.
Al-Mashhadani belongs to the Iraqi Islamic party of Tariq al-Hashimi, the vice-president. By law, at least a quarter of the 275 members of parliament are women though there are few women in leading positions in the main political blocs.
Hamdi Hassun, the head of the Iraqi Islamic party in Diyala governorate, told Aljazeera that unidentified fighters stopped the convoy of al-Mashhadani at 9.30am in al-Shaab city.
According to Hassun, she was taken at gunpoint and her guards handcuffed. Their mobile phones were snatched and they were taken to an undisclosed destination.
On of the guards was shot and injured by the gang as he escaped. He reached a police station to report the incident.
Hassun said no one had contacted the party or set demands in return for his colleague's release.