On 30 May 2004, he was kidnapped in Fallujah — about 50 km (31 mi) west of Baghdad — by the Islamist group Jama'at al-Tawhid wal-Jihad and held as a hostage.

The group, which was allegedly led by Abu Musab al-Zarqawi, killed him on or about 22 June when South Korea refused to meet their demands of cancelling its plans of sending 3,000 more troops to Iraq and withdrawing the 660 military medics and engineers already there.

)[citation needed] Jama'at al-Tawhid wal-Jihad had initially set a 21 June deadline in a videotape showing Kim pleading for his life.

However, there are also reports that a videotape of Kim in captivity, in which he appears calm and openly criticizes U.S. intervention in Iraq, was delivered to the Associated Press Television News offices in Baghdad in the beginning of June, and that on 3 June an AP reporter in Seoul contacted the South Korean foreign ministry asking if they knew of a missing person with a name similar to Kim Sun-il's.

Reports and editorials in South Korea's press reflected despair at the death of the hostage Kim Sun-il in Iraq, but also defiance toward the kidnappers.

South Korean TV stations interrupted their schedules when Mr Kim's body was discovered and subsequently broadcast special rolling news programmes.