The Iraq Historic Allegations Team (Ihat) has decided not to proceed in 57 cases, the MoD said.
A further case was stopped by the military's prosecuting authority.
The news follows a call by PM David Cameron to "stamp out" what he called "spurious" legal claims against British troops returning from  action overseas.
Ministers had been asked to draw up plans to curb claims, including by restricting "no win, no fee" arrangements, Mr Cameron said.
Lawyers say no-one is above the law, and many abuse cases have been proven.
Ihat was set up to review and investigate allegations of abuse made by Iraqi civilians against UK armed forces personnel in Iraq during the period of 2003 to July 2009.
It currently lists more than 1,300 allegations under investigation, ranging from murder to low-level violence.
Conservative MP Richard Benyon, a member of the Commons Defence select committee, said innocent veterans were being unfairly targeted.
He told The Sun: "It's an intolerable burden for people who have served their country well to face this knowing they're innocent."
Investigations into nearly 60 allegations of unlawful killing against UK soldiers in Iraq have been dropped, the Ministry of Defence says.