Councilwoman Kshama Sawant, who wrote the legislation, said the fight against caste bias "is deeply connected to the fight against all forms of oppression".
Advocates of the ban say that it is needed to prevent caste bias from becoming more prevalent in the US.
The caste system in India dates back over 3,000 years and divides Hindu society into rigid hierarchical groups.
The ordinance passed by Seattle on Tuesday follows similar bans on caste bias that have been introduced on the campuses of US universities in recent years.
"Caste discrimination doesn't only take place in other countries," said Ms Sawant, who is the only Indian American on the Seattle city council.
"It is faced by South Asian American and other immigrant working people in their workplaces, including in the tech sector, in Seattle and in cities around the country."
Ms Sawant, a socialist, has previously spoken of being raised in an upper-caste Hindu Brahmin household in India and witnessing such discrimination.
Source: www.bbc.com
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