Japan, hit by the loss of Kagawa just before kick-off with back pain, rode their luck at times in front of a packed Saitama Stadium but ended with all three points thanks to Ryoichi Maeda's headed goal on 25 minutes. The result gives Japan, who have 10 points from four games, an eight-point lead at the top of Group B ahead of Tuesday's later matches. The top two in two groups of five earn an automatic ticket to Brazil.
It provided an unhappy return for former Japan coach Zico, whose makeshift Iraq line-up - hit by a series of injuries and suspensions - tested the hosts, especially in the opening exchanges. Iraq, who were unbeaten after drawing their first two games, started brightly and Japan keeper Eiji Kawashima was forced into action with a key stop in the opening minutes.
However, it was Japan who got the breakthrough when Stuttgart's Shinji Okazaki fed Jubilo Iwata striker Maeda in the six-yard box for the game's only goal. As half-time neared, the dangerous Ahmed Yaseen extended Kawashima with a goal-bound shot that was curling inside the far post.
Japan looked more comfortable after the break, with CSKA Moscow playmaker Keisuke Honda a particular threat, and they finished the match with high hopes of reaching their fifth straight FIFA World Cup in Brazil. "It was really tough," said Japan's coach Alberto Zaccheroni. "We want to win the ticket to the World Cup as quickly as possible. I'm going to start thinking about our next game," added the Italian.
Japan will next play Oman away on 14 November, while Iraq host Australia - in a third-party venue - on 16 October. "We tried hard to win this game, but it ended in a defeat. Japan prepared for the game very well," Zico said.
The extent of Kagawa's injury was not immediately clear. Manchester United have a Premier League clash at home against Wigan Athletic on Saturday and their UEFA Champions League opener is against Turkey's Galatasaray next week.