Hamill, 43, of Macon, Miss., was discovered when he approached a U.S. patrol from the 2nd Battalion 108th Infantry, part of the New York National Guard, in the town of Balad, 35 miles south of Tikrit, a spokesman for U.S. troops in Tikrit said.
He identified himself, then led the patrol to the house where he had been held captive. The unit surrounded the house and captured two Iraqis with an automatic weapon, said the spokesman, Maj. Neal O'Brien.
Hamill, a truck driver working for a subsidiary of the contractor Halliburton, had a gunshot wound to his left arm that appeared to be infected, and was flown by helicopter to Bagdad, O'Brien said. Video images of Hamill released by his captors a day after his abduction showed his left arm in a sling, suggesting he was wounded during the attack on his convoy.
"Mr. Hamill apparently escaped from a building," Brig. Gen. Mark Kimmitt told reporters in Baghdad, saying Hamill was in "good health."
"He has spoken to his family. He is now ready to get back to work."
In Macon, Hamill's wife, Kellie, said she received a call about 5:50 a.m. telling her that her husband had been found alive. She said it was "the best wakeup call I've ever had."
Kellie said one of the first things she did was to wake up their children.
"There has been a lot of praying and I am so grateful to everybody," she said. "We're all so relieved, so excited."
She said she had no idea when her husband would be returning home or when she would be able to see him.
"I want everybody know he's been found," she added. "I'm going to be shouting it from the rooftops."
There had been no word on his fate since the video released on April 10, which showed Hamill standing in front of an Iraqi flag. A spokesman heard on the video threatened to kill him within 12 hours unless the United States lifted the Marine siege of the city of Fallujah.
Hamill re-appeared about 50 miles north of the Abu Ghraib region, west of Baghdad, where he was snatched on April 9 during an attack on a supply convoy he was driving in.
His abduction came amid a flare-up of kidnappings of foreigners during the intense violence that began in early April. Up to 40 people from a wide range of nationalities were abducted, though most were later freed. One hostage, an Italian, was executed by his captors, who filmed the slaying and sent a video to Arab television stations.
An American soldier, Pfc. Keith M. Maupin, remains in the hands of kidnappers, as do three other Italian security guards.
Maupin and Hamill were in the same convoy that came under attack on the western outskirts of Baghdad, one of many amid an insurgent campaign against supply routes around the capital.
The April 9 attack had a particularly heavy toll: besides Hamill and Maupin, six other employees of the Halliburton subsidary KBR - formerly known as Kellogg, Brown & Root - and another U.S. solder were missing.
The bodies of four of the KBR employees were later found in a shallow grave near the attack. The body of the soldier, Sgt. Elmer Krause of Greensboro, N.C., was also found and identified on April 23.
Two days after the attack, video footage given by insurgents to Arab television showed the bloodied bodies of two other Western civilians who had been seen being dragged out of a car during the same attack.
Hamill - a dairy farmer who signed on with KBR in Iraq to pay off debts - was also filmed as he was being abducted. The insurgents allowed an Australian camera crew to film him in the back seat of the gunmen's car. Hamill identified himself before the car sped off, wisking him away.
The next day, the Arab television station al-Jazeera showed the video of Hamill standing in front of an Iraqi flag.
"Our only demand is to remove the siege from the city of mosques," a spokesman said in the tape. "If you don't respond within 12 hours ... he will be treated worse than those who were killed and burned in Fallujah."