Of the 1,000 US employees at the US embassy in Iraq, only 10 have a working knowledge of Arabic, ABC News reported.
The count is still an improvement from last year when only six people in the embassy spoke Arabic, according to the report Wednesday.
An assessment of Government Accountability Office (GAO) in 2006 noted the shortage of speakers of Arabic, which the State Department classifies as "superhard", is acute at US embassies in Arab nations.
The report found that people who did not speak the language at the designated level filled more than one-third of public policy diplomacy positions at Arabic language posts.
In April, the GAO said the State Department had started taking action to correct the problems from last year's report.
The State Department grades language proficiency on a five-point scale, from elementary knowledge (S-1) to native or bilingual proficiency (S-5).
On this scale, only 10 employees at the Iraq embassy have an S-3 rating for reading and speaking, which means they can speak or write the language with "reasonable ease".