The town of Qaraqosh - on the outskirts of Mosul - was recaptured by Iraqi troops last week with help of US-led coalition air strikes.
Qaraqosh was captured by Islamic State in 2014, causing many Christians to flee or face execution.
Worshippers gathered for Mass on Sunday at the Church of the Immaculate Conception. The church building was left in ruin after the fighting over the last two years, but is still standing. The service was led by Syriac Catholic Archbishop of Mosul Butrus Moshe.
The Archbishop told worshippers: "Our role today is to remove all the remnants of Daesh."
"This includes erasing sedition, separation and conflicts, which victimised us," he continued.
Christianity in Iraq dates back to the first century. The number of Christians in the region dropped significantly following the overthrow of Saddam Hussein in 2003. Since the declaration of a "caliphate" by ISIS leader Abu Bakr al-Baghdadi in 2014, thousands of Christians have been murdered or displaced.