A CNN crew taken to the site, near Sabha, by military forces loyal to Libya's National Transitional Council said there were two warehouses filled with barrels marked "radioactive" and several plastic bags of yellow powder.
The International Atomic Energy Agency in 2004 confirmed the Libyan government had yellowcake, or processed uranium ore, stored in Sabha. The yellowcake can be refined to produce enriched uranium for nuclear purposes, CNN said.
Old surface-to-air missiles and rockets were also found at the site.
CNN said a U.S. Defense Department official, who declined to be identified, said Libya's stockpile of uranium yellowcake would need to go through extensive processing, including enrichment, before it could be used to build a bomb. He told CNN the processes do not exist in Libya.
The NTC said the town of Sabha has been mostly taken over by revolutionaries. Gadhafi was thought to be hiding in the town but no trace of him has been found.
CNN said Gadhafi's Gaddadfa tribe is allegedly ready to negotiate an agreement with NTC.