The Islamic State (IS) group captured Qaraqosh in the north overnight after the withdrawal of Kurdish forces.
An international Christian organisation said at least a quarter of Iraq's Christians were leaving Qaraqosh and other surrounding towns.
IS has seized large parts of Iraq and Syria to create an Islamic caliphate.
The French organisation Fraternite en Irak said on its Facebook page (in French) that a majority of inhabitants of Nineveh province had fled as the militants took over Qaraqosh.
The archbishops of the cities of Mosul and Kirkurk confirmed that the Christian town had fallen.
Iraq is home to one of the world's most ancient Christian communities, but numbers have dwindled amid growing sectarian violence since the US-led invasion in 2003.
