American weapons experts say they have identified at least four occasions on both sides of the Iraq-Syria border when IS has used mustard agents, an official told the BBC.
The source said that the chemical was being used in powder form, packed into traditional explosives like mortar rounds by a terror cell dedicated to building the weapons, The Times reported.
He said "They're using mustard. We know they are. We've seen them use it on at least four separate occasions on both sides of the border - both Iraq and Syria. We assess that they have an active chemical weapons little research cell that they're working on to try and get better at it".
Though exposure to sulphur mustard usually is not fatal, there is no treatment or antidote, which means that the agent must be removed entirely from the body.
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Syria is supposed to be free of chemical weapons after a UN-backed deal that saw the Syrian government hand over 1,180 tonnes of declared toxic agents and precursor chemicals to the Organisation for the Prohibition of Chemical Weapons (OPCW).
That process began in October, 2013 and was completed by June of the following year.
More than 200,000 people have died since the Syrian civil war began after anti-government protests in early 2011 but only a tiny percentage of the deaths are believed to have been caused by chemical weapons.