The Sudanese driver was killed immediately, and the American died of his injuries within hours, officials said.
"This afternoon, the American officer succumbed to his injuries and passed away," said Walter Braunohler, the spokesman at the U.S. Embassy in Khartoum.
Braunohler said the diplomat, whose name was not released, worked for the U.S. Agency for International Development.
The Sudanese Foreign Ministry identified the wounded American as a humanitarian aid official and said he was shot five times in the hand, shoulder and belly. The diplomat underwent surgery following the attack, according to the ministry's statement.
The ministry identified the Sudanese driver who was killed as 40-year-old Abdel Rahman Abbas and said the attack occurred around 4 a.m. local time as the car was heading to a western suburb of Sudan's capital, Khartoum.
Both U.S. and Sudanese officials said they were investigating but could not yet provide details on the circumstances surrounding the attack.
Crime is fairly high in Khartoum, Sudan's capital, although much lower than in other east African cities like Nairobi, Kenya.
On Monday, a joint peacekeeping force took over in Darfur a long-awaited change that is intended to be the strongest effort yet to solve the world's worst humanitarian crisis but which already is struggling. Also Monday, President Bush signed legislation to allow states and local governments to cut investment ties with Sudan because of the bloodshed in Darfur.
Al-Qaida leader Osama bin Laden and his deputy Ayman al-Zawahri have called in the past for "jihad," or holy war, in Sudan if U.N. peacekeepers deploy in Darfur most recently in a September video by al-Zawahri. Bin Laden was based in Sudan until the late 1990s when the government expelled him, but there has been little sign of activity by the terror network in the country recently.
Last year, a group calling itself al-Qaida's branch in Sudan claimed responsibility for the slaying of a Sudanese newspaper editor accused of blasphemy for articles run in his Al-Wifaq newspaper. It was the first time a group in Sudan claimed allegiance to al-Qaida, but Sudanese officials have said the claim was fake and the slaying was not al-Qaida-linked.
At the same time, the Sudanese government often drums up anti-Western sentiment in the state media, often accusing the West of seeking to re-colonize Sudan using Darfur as a pretext.
In November, a small protest was held after a British teacher at a Khartoum private school was arrested for allegedly insulting Islam by letting her students name a teddy bear Muhammad she was sentenced to prison but quickly deported.
A U.S. diplomat was killed in 2002 in the Jordanian capital Amman. The assassination was blamed on al-Qaida-linked militants.