A senior US defence official said around 200 additional American military personnel would be deployed, pushing the total figure past 4,000.
The United States heads an international coalition that is carrying out strikes against IS and also providing training and other assistance to forces fighting the jihadists in both Iraq and neighbouring Syria.
It has been bombing IS since August 2014, but most of the strikes are carried out by planes or drones.
Carter arrived in Baghdad from the United Arab Emirates, his first stop on a Gulf tour during which he will seek to shore up support for Iraq.
IS overran large areas north and west of Baghdad in 2014, but Iraqi forces have since regained significant ground from the jihadists.
While most American forces in Iraq play advisory and support roles, Washington has also sent in special forces to carry out raids against IS, and US Marines have deployed to provide artillery support for Iraqi troops.