The fighting left seven Filipino marines dead and nine others wounded on the island of Jolo, said Colonel Jose Cenabre, a local military commander.
Four members of the Abu Sayyaf group were also killed in the firefight, Cenabre, the commander of a marine brigade in the area, said in a report.
A marine reconnaissance team ran into an Abu Sayyaf unit near the town of Patikul as government forces tracked members of the militant group who were suspected over a recent kidnapping in the area, he added.
The group is on the US government's list of so-called foreign terrorist organisations.
About 600 US troops have been rotating through the southern Philippines for a decade to help train local troops in hunting the Abu Sayyaf, who enjoy local support at their bases in some of the poorest areas of the Philippines.