Ronnie Smith, a 33-year-old from Texas, had been running in the central Al-Fwihet neighbourhood of the eastern city of Benghazi when he was shot, security services spokesman Ibrahim al-Sharaa said yesterday.
No one has yet claimed responsibility for the killing, which comes 15 months after the US ambassador and three other Americans were killed in an attack on the US consulate in Libya's second city.
International School Benghazi director Adel al-Mansuri said Smith, who was married and the father of a two-year-old boy, had joined the faculty as a chemistry teacher late last year.
The director added, without providing details, that another American teacher at the school had been taken to a secure location until he can travel home.
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The State Department confirmed that a US citizen had been shot and killed in Benghazi.
"We offer our condolences to the victim's loved ones. We are in contact with the family and are providing all appropriate consular assistance," deputy spokesperson Marie Harf said.
US Ambassador Deborah Jones added her condolences, saying on Twitter: "My heart goes out to the family of the American school teacher murdered today in #Benghazi.
Smith's killing triggered an outpouring of emotion.
"It is with a very heavy heart that we announce the death of Ronnie Smith... Shot & killed in #Benghazi," tweeted the Libyan Youth Movement.
"Ronnie was living and teaching in #Benghazi on his own accord, he told friends 'If I were to be killed, I will die for Education.'"
Another Benghazi-based Twitter user identified as Taqwa Embasher posted: "Smith was a kindhearted, generous person. I was a target of his kindness and generosity. RIP my best teacher&friend."
International School Benghazi is one of the few foreign schools still operating in Libya, with most having shut down last year and earlier this year because of the growing lack of security.