Brig. Gen. Domingo Tutaan said seven marines and four members of al-Qaida-linked Abu Sayyaf were killed in a close-quarters clash outside the town of Patikul on the island of Jolo, Voice of America reported.
At least nine government soldiers were wounded, Tutaan said.
He said the firefight began as marines tracked members of the group, the BBC reported.
The militants are believed responsible for recent kidnappings for ransom in the area, Tutaan said.
Abu Sayyaf, thought to have a membership of less than 400, is considered the smallest but most radical extremist movement in the southern Philippines.