According to initial reports, four of the five injured contractors are American citizens, a defense official told CNN.
The nationality of the contractor killed was not disclosed though the defense official said initial reports suggest they were not American.
Earlier a statement from the Interior Ministry of the Kurdistan Regional Government said several rockets had been launched toward the city.
The regional government called for locals to stay home as authorities investigated the incident. No group has claimed responsibility for the attack. The US is currently gathering intelligence to try to determine where the rockets were launched from, the defense official said.
Video from the scene showed at least one of the rockets landed on a busy urban street, sending a cloud of sparks and smoke into the air.
Erbil, which is located in the semi-autonomous Kurdistan region and hosts US troops, is expected to be one of several cities Pope Francis visits in early March in a historic trip to Iraq.
That attack came one day after the Trump administration had told Iraqi leaders that it would close the US embassy in Baghdad if Iranian-backed militias kept targeting US personnel in the country. The threat followed the decision to withdraw thousands of US troops from Iraq in September, bringing the total number from 5,200 troops to approximately 3,000. The number was further reduced to 2,500 shortly before President Joe Biden took office. The acting secretary of defense at the time, Christopher Miller, had said the drawdown was in response to the “increased capabilities of the Iraqi security forces
CNN’s Taylor Barnes contributed to this report.