Military officials had told CNN that a second test of the weapon had produced negative results while a third lab test was inconclusive.
US Navy Capt. Jeff Davis, a Pentagon spokesman, told reporters Monday that the US has issued 50,000 gas masks to the Iraqi forces in order to counter ISIS chemical weapons attacks.
"We have no conclusive evidence" that mustard gas was used, Dorrian said.
"We want to make sure that the Iraqi security forces and that the Peshmerga have the ability to detect this and to defend against it", Davis added.
In an about-face, USA military officials said Tuesday that no "mustard agent" turned up on the rocket that landed on a US -controlled base in northern Iraq last week, according to lab tests.
Definitive lab tests conclude: "No mustard agent present in munitions fired at Qayyarah West AB Sept 20", tweeted Air Force Col. John Dorrian, spokesman for the US -led coalition fighting the Islamic State in Iraq and Syria (ISIS).
According to the spokesman, American forces on the ground have masks and other full-body gear in case of a chemical attack. "It's more of an irritant than anything else, but again, not something we view as militarily significant", Davis said, adding that the gas form of mustard agent is far more lethal, and had found extensive use in the First World War.
"We fully recognize this is something that ISIL has done before", Davis said, using the government's preferred acronym for the group. They would love to be able to use chemical weapons against us, against the Iraqis as they move forward.
In his briefing last Friday, Dorrian said eight to 12 brigades of the Iraqi Security Forces were "ready to go" against Mosul, where ISIS has had almost two years to build up defenses.
He said United States troops deployed to the region have the training and equipment they need to defend against chemical attacks and are working to ensure the Iraqis are prepared and properly equipped as well.
Officials believe the Islamic State, which could have up to 4,500 militants in Mosul, has rigged the city with improvised explosive devices, which could contain chemical agents.
The US has also seen reports that ISIS has dug trenches and filled them with oil to be set on fire once the offensive begins.