It was not clear when the beheading video was recorded, but several hours after it was posted, both the White House and his family appeared to confirm the reporter's death.
According to an FBI missing persons alert, the 40-year-old Foley had employed a translator to help him travel across the Syrian-Turkish border. The Rochester, N.H., native was captured in Idlib in Syria on Nov. 22, 2012, with the translator later released.
ISIS's sweep through northern Iraq, bringing it close to Baghdad and in control of the second city, Mosul, drew U.S. airstrikes on the country for the first time since the end of the American occupation in 2011.
The Sunni militant group has declared a caliphate in parts of Iraq and Syria in areas it controls, and the video implores President Barack Obama to stop the U.S. intervention in the area.
ISIS claims it is prepared to kill another American journalist they are holding.
The "Free James Foley" page on Facebook posted a message Tuesday night it said was from Foley's mother, Diane.
Calling Foley "an extraordinary son," the statement read: "We have never been prouder of our son Jim. He gave his life trying to expose the world to the suffering of the Syrian people.
"We implore the kidnappers to spare the lives of the remaining hostages. Like Jim, they are innocents. They have no control over American government policy in Iraq, Syria or anywhere in the world."
Two U.S. officials who spoke on condition of anonymity to The Associated Press because they were not authorized to discuss the video, said they believe it to be Foley.
One official told the AP that Obama is expected to make a statement Wednesday about the killing.
"If genuine, we are appalled by the brutal murder of an innocent American journalist and we express our deepest condolences to his family and friends," National Security Council spokeswoman Caitlin Hayden said in a statement earlier in the day.
ISIS has also posted videos for two consecutive days with more generalized threats to strike targets in the United States, if the U.S. continues to offer assistance to the Iraqi government and Kurdish forces in the north.
In addition, ISIS on Monday claimed responsibility for the kidnapping of a Japanese national in Syria.
Foley, a freelance journalist working for the international news website GlobalPost and Agence France-Press, had been kidnapped in early 2011 while reporting in Libya. He was among four journalists captured and later released.
In a video posted to GlobalPost recounting his 44-day captivity in Libya, Foley wrestled with returning to reporting from conflict zones.
"There's always that sort of high of being close to combat and then being able to come back and tell that story," he said.
"For me to do this again is kind of a selfish act, if I don't put in safeguards to make sure I don't myself or my friends at risk."