The BBC's Arab affairs editor Sebastian Usher says the killing of Mr Saad is a blow to Saudi-led efforts to re-establish Aden as a secure base for the government which spent months in exile in Saudi Arabia.
Mr Saad was a significant figure not just as the administrative head of Aden, but for the role he played in driving Houthi rebels out of the port city earlier this year, our correspondent says.
But Aden has remained vulnerable to violence with jihadists carrying out regular attacks.
The claim by IS introduces another dangerous factor into the equation, our correspondent says, because like the long established al-Qaeda franchise in Yemen, IS has gained strength from the violence and chaos of the past nine months of all-out conflict.
Mr Saad's murder is also likely to complicate further the latest UN-led efforts to get a peace process under way.
IS has endeavoured to make the situation even worse, our correspondent says, by bombing mosques and killing captives in its trademark style of grotesque and horrifying showmanship.
In statement, IS promised more operations against "the heads of apostasy in Yemen" along with photos of a booby-trapped vehicle which detonated as a white vehicle carrying Mr Saad drove past.
A witness of the blast told the BBC that the explosion was "very powerful" the ensuing fire was "very intense".
"We pulled some wounded people out but we couldn't get the governor out because [his] car was on fire," Abu Mohammed said.
Sunday's violence came after the UN envoy to Yemen met President Abdrabbuh Mansour Hadi in Aden on Saturday in an effort to bring eight months of civil war to an end.
Air strikes and fighting on the ground in Yemen have killed more than 5,700 people since the Saudi-led coalition began a campaign to restore the government in March, according to the UN.
The UN hopes to organise talks later this month between the government and the Houthi rebels, who support former President Ali Abdullah Saleh.
Islamic State declared its presence in November and have carried out a number of attacks since then.
Why is there fighting in Yemen?
Northern Shia Muslim rebels known as Houthis, backed by forces loyal to Yemen's ex-president, took over parts of Yemen, including the capital, Sanaa, and forced the government into exile in March
The rebels accused the government of corruption and of planning to marginalise their heartland within a proposed federal system
Forces loyal to the government and southern militias regained control of Aden in July, aided by Saudi-led coalition air strikes and troops
The UN says that fighting on the ground and air strikes in Yemen have killed more than 5,700 people since March
Keep these in mind as you contemplate the direction of the American government over the past 50 years and especially since the Obama election.
The Goals of Communism
(as read into the congressional record January 10, 1963, from "The Naked Communist" by Cleon Skousen)
1. U.S. acceptance of coexistence as the only alternative to atomic war.
2. U.S. willingness to capitulate in preference to engaging in atomic war.
3. Develop the illusion that total disarmament of the United States would be a demonstration of moral strength.
4. Permit free trade between all nations regardless of Communist affiliation and regardless of whether or not items could be used for war.
5. Extension of long-term loans to Russia and Soviet satellites.
6. Provide American aid to all nations regardless of Communist domination.
7. Grant recognition of Red China. Admission of Red China to the U.N.
8. Set up East and West Germany as separate states in spite of Khrushchev's promise in 1955 to settle the German question by free elections under supervision of the U.N.
9. Prolong the conferences to ban atomic tests because the United States has agreed to suspend tests as long as negotiations are in progress.
10. Allow all Soviet satellites individual representation in the U.N.
11. Promote the U.N. as the only hope for mankind. If its charter is rewritten, demand that it be set up as a one-world government with its own independent armed forces. (Some Communist leaders believe the world can be taken over as easily by the U.N. as by Moscow. Sometimes these two centers compete with each other as they are now doing in the Congo.)
12. Resist any attempt to outlaw the Communist Party.
13. Do away with all loyalty oaths.
14. Continue giving Russia access to the U.S. Patent Office.
15. Capture one or both of the political parties in the United States.
16. Use technical decisions of the courts to weaken basic American institutions by claiming their activities violate civil rights.
17. Get control of the schools. Use them as transmission belts for socialism and current Communist propaganda. Soften the curriculum. Get control of teachers' associations. Put the party line in textbooks.
18. Gain control of all student newspapers.
19. Use student riots to foment public protests against programs or organizations which are under Communist attack.
20. Infiltrate the press. Get control of book-review assignments, editorial writing, policymaking positions.
21. Gain control of key positions in radio, TV, and motion pictures.
22. Continue discrediting American culture by degrading all forms of artistic expression. An American Communist cell was told to "eliminate all good sculpture from parks and buildings, substitute shapeless, awkward and meaningless forms."
23. Control art critics and directors of art museums. "Our plan is to promote ugliness, repulsive, meaningless art."
24. Eliminate all laws governing obscenity by calling them "censorship" and a violation of free speech and free press.
25. Break down cultural standards of morality by promoting pornography and obscenity in books, magazines, motion pictures, radio, and TV.
26. Present homosexuality, degeneracy and promiscuity as "normal, natural, healthy."
27. Infiltrate the churches and replace revealed religion with "social" religion. Discredit the Bible and emphasize the need for intellectual maturity which does not need a "religious crutch."
28. Eliminate prayer or any phase of religious expression in the schools on the ground that it violates the principle of "separation of church and state."
29. Discredit the American Constitution by calling it inadequate, old-fashioned, out of step with modern needs, a hindrance to cooperation between nations on a worldwide basis.
30. Discredit the American Founding Fathers. Present them as selfish aristocrats who had no concern for the "common man."
31. Belittle all forms of American culture and discourage the teaching of American history on the ground that it was only a minor part of the "big picture." Give more emphasis to Russian history since the Communists took over.
32. Support any socialist movement to give centralized control over any part of the culture--education, social agencies, welfare programs, mental health clinics, etc.
33. Eliminate all laws or procedures which interfere with the operation of the Communist apparatus.
34. Eliminate the House Committee on Un-American Activities.
35. Discredit and eventually dismantle the FBI.
36. Infiltrate and gain control of more unions.
37. Infiltrate and gain control of big business.
38. Transfer some of the powers of arrest from the police to social agencies. Treat all behavioral problems as psychiatric disorders which no one but psychiatrists can understand.
39. Dominate the psychiatric profession and use mental health laws as a means of gaining coercive control over those who oppose Communist goals.
40. Discredit the family as an institution. Encourage promiscuity and easy divorce.
41. Emphasize the need to raise children away from the negative influence of parents. Attribute prejudices, mental blocks and retarding of children to suppressive influence of parents.
42. Create the impression that violence and insurrection are legitimate aspects of the American tradition; that students and special-interest groups should rise up and use united force to solve economic, political or social problems.
43. Overthrow all colonial governments before native populations are ready for self-government.
44. Internationalize the Panama Canal.
45. Repeal the Connally reservation so the United States cannot prevent the World Court from seizing jurisdiction over nations and individuals alike.
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