Cameron told Parliament on Monday that Reyaad Khan was killed in a targeted attack by a UK Royal Air Force drone as he was driving in a vehicle near the ISIS-controlled Syrian town of Raqqa last month.
A fellow Briton, Ruhul Amin, was one of two other ISIS fighters killed in the strike, he said in a statement that also outlined UK plans to take in up to 20,000 Syrian refugees over the next five years.
Khan was the target of the military action, Cameron said -- and a legitimate one because he was planning armed attacks on British soil.
"They were ISIL fighters, and I can confirm that there were no civilian casualties," the Prime Minister said, using an alternative acronym for ISIS.
"We took this action because there was no alternative. In this area, there is no government we can work with; we have no military on the ground to detain those preparing plots; and there was nothing to suggest that Reyaad Khan would ever leave Syria or desist from his desire to murder us at home, so we had no way of preventing his planned attacks on our country without taking direct action."
UK Defence Secretary Michael Fallon told UK media Tuesday that the government would "not hesitate" to repeat the action if there was no other way to prevent a terror attack in Britain.
"These were terrorists who had been planning a series of attacks on the streets of our country, some involving public events," he said. "There are other terrorists making similar plans and we have to do what we can to keep our streets safe."
A Ministry of Defence news release
noted stories by the Daily Express and Daily Telegraph newspapers reporting that Khan was plotting an attack on Britain's Queen Elizabeth II. Cameron didn't specify what his alleged plans involved.
Cameron: Khan was 'direct threat' to UK
In his statement to Parliament, Cameron sought to head off inevitable questions over the legality of the strike.
"I am clear that the action we took was entirely lawful. The Attorney General was consulted and was clear that there would be a clear legal basis for action in international law. We were exercising the UK's inherent right to self defense," he said.
UK intelligence agencies had identified the "direct threat to the UK" from Khan, he said, and the decision to act against him where possible was taken at a meeting of the most senior members of the National Security Council.
In response, acting opposition Labour Party leader Harriet Harman asked why Attorney General Jeremy Wright did "not authorize the specific action, rather than merely confirming that 'there was a legal basis' for it."
She also called for any written advice given by the attorney general to be published, and for the government to make public whatever it could about the nature of the threat posed by Khan.
UK rights group Reprieve voiced strong concerns over the strike.
"Make no mistake -- what we are seeing is the failed US model of secret strikes being copied wholesale by the British government," said Kat Craig, a legal director for Reprieve, in a news release
"Ministers repeatedly promised Parliament and the public that there would be no military operations in Syria without Parliamentary approval. The fact that David Cameron has bypassed Parliament to commit these covert strikes is deeply worrying -- as is his refusal to share what legal advice he was given."
Cameron: UK position on Syria action unchanged
In 2013, lawmakers in the House of Commons rebuffed Cameron's call for a strong response to allegations the Syrian government had used chemical weapons.
Parliamentary authorization has only been given for UK military action in neighboring Iraq as part of the international coalition against ISIS.
In July, it emerged that British pilots embedded with coalition forces have conducted airstrikes in Syria
against ISIS. But the UK Ministry of Defence said that "the UK itself is not conducting air strikes in Syria."
Cameron insisted that the drone strike against Khan had changed nothing in terms of that policy.
"I want to be clear that the strike was not part of coalition military action against ISIL in Syria; it was a targeted strike to deal with a clear, credible and specific terrorist threat to our country at home," he said. "The position with regard to the wider conflict with ISIL in Syria has not changed."
Cameron also said Monday that the U.S. government had confirmed that a third UK national, Junaid Hussain, was killed in an American airstrike on August 24 in Raqqa.