The military gains came as a senior UN rights official said IS jihadists had carried out "acts of inhumanity on an unimaginable scale" in Iraq, and caretaker premier Nuri al-Maliki vowed the country would be the group's "graveyard".
The London-based Amnesty meanwhile cited "hair-raising" accounts from survivors of massacres, accusing the jihadists of "war crimes, including mass summary killings and abductions".
"The massacres and abductions being carried out by the Islamic State provide harrowing new evidence that a wave of ethnic cleansing against minorities is sweeping across northern Iraq," said Donatella Rovera, the rights group's senior crisis response adviser currently in northern Iraq.
The Sunni radical IS has pressed a campaign of terror in areas under its control in Syria and Iraq, which it has declared an Islamic "caliphate," carrying out decapitations, crucifixions and public stonings.
The breakthrough at Amerli on Sunday was the biggest success for the Iraqi government since IS-led militants overran much of the Sunni Arab heartland north and west of Baghdad in June.
The United States carried out limited air strikes in the area during the operation, the first time it has expanded its more than three-week air campaign against IS beyond north Iraq.
Iraqi forces kept up the momentum yesterday, with Kurdish peshmerga fighters and Shiite militiamen retaking Sulaiman Bek, a town north of Amerli that had been an important militant stronghold.
"Within a few hours, we were able to clear the town completely," the commander of the Shiite Badr militia, Transport Minister Hadi al-Ameri, told AFP in Sulaiman Bek.
Fighters celebrated in the abandoned town, firing in the air, chanting anti-IS slogans and showing off a captured black flag of the group.
Security forces and Shiite militiamen later retook the nearby town of Yankaja from the militants, officials said.
Before the operation, the mainly Shiite Turkmen residents of Amerli were endangered both because of their faith, which jihadists consider heresy, and their resistance to the militants who had besieged the town for 11 weeks.
UN Iraq envoy Nickolay Mladenov had warned that they faced a "massacre".