The man was an Egyptian national and was known as the deputy “emir” of the Al Hesbah force in the province, the British-based Observatory said. His body, which showed signs of torture, was found near a power plant in Al Mayadeen city, it said.
The Observatory, which gathers information from a network of sources on the ground, said the message “This is evil, you Shaikh” was also found written on the corpse, which had a cigarette in its mouth.
It was not clear who had carried out the beheading.
Residents in areas controlled by Daesh have said the group has banned smoking in public.
News of the emir's beheading comes just a day after pictures emerged of what appears to show ISIS soldiers executing a group of Iraqi policemen.
Entitled 'the Day of Judgement', the photos show eight Iraqi men dressed in orange Guantanamo Bay style jumpsuits.
Standing behind them, armed with pistols, are Islamic State's notorious security forces, known for carrying out mass public executions in broad daylight.
Unknown assailants also tried to kill two Daesh militants in the city, the Observatory said. The first attempt was when a car tried to run over a fighter near a roundabout.
Another was hit by an attacker carrying a metal weapon and travelling by motorcycle, and was seriously wounded.
Daesh has fought with other insurgents and cracked down on local populations. It has also occasionally killed its own members for what it describes as violations.
Residents and activists say it has beheaded and stoned to death many people in areas it controls for being enemy fighters or for actions they see as violating their reading of Islamic law, such as adultery and blasphemy.
In December, a similar self-declared police force in western Syria decapitated four men after accusing them of blasphemy, according to the observatory. It reported a similar killing days earlier in the north of the country.
You know what they say, 'What goes around, comes around!' It appears that if they don't have any 'enemies' to behead that they will turn on their own. They're not happy unless they're lopping off heads.