PO3 Newlove and Petty Officer 2nd Class Justin McNeley got into a gun battle when they drove into an insurgent stronghold in Logar province on Friday.
PO2 McNeley, a 30-year-old father-of-two from Colorado, was killed in the firefight and his body was recovered on Sunday.
But PO3 Newlove was taken hostage by the Taliban and a spokesman said the group's leaders were deciding upon his fate.
Then, spokesman Zabiullah Mujahid announced the group had, two days earlier, left the body of a dead American soldier for the US forces to recover.
PO3 Newlove's remains were found hours later after an extensive search by US Marines.
Mujahid offered no explanation for PO3 Newlove's death.
Nato officials have given no clue as to why the two servicemen were in such a dangerous part of eastern Afghanistan but did confirm their names.
Both were instructors at a counter-insurgency school for Afghan forces, according to officials.
The school was based in Kabul and had classrooms outside the capital, but the pair were never assigned anywhere near where PO2 McNeley's body was recovered, officials said.
The chief of police of Logar province, General Mustafa Mosseini, said he believed the body washed downstream after rain.
He noted that in the past several days the Taliban were being pressured by coalition forces in the area.
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