The group seized Musa Qala on Thursday after a truce deal between Nato's British forces and the Taliban - brokered by local tribal elders in October - broke down.
Nato said on Sunday it carried out an air strike on a vehicle carrying Mullah Ghaffour, the Taliban leader in the area, killing him and an unknown number of fighters.
Squadron Leader Dave Marsh, a Nato spokesman, said: "By his removal, the elders and people of Musa Qala have been protected."
The attack was within a five-kilometre zone around Musa Qala, capital of the district of the same name, that British forces agreed not to penetrate in the controversial deal.
Town stormed
Colonel Thomas Collins, a spokesman for Nato's International Security Assistance Force (Isaf) said the strike had taken place within the zone affected by the agreement.
The strike "was thoroughly co-ordinated with the Afghan army and we were given permission," he said.
Taliban fighters stormed Musa Qala town, disarming the police and occupying the district administrative centre.
They alleged Nato forces had violated the deal with an air strike last week which the force said killed Taliban leaders.
Nato denied the claim, saying the strike was outside the exclusion zone.
The Nato offensive began on the same day that the US assumed control of the 33,000 Nato troops in Afghanistan.
