He will star alongside Tom Cruise in the film, 33 years after the original was released, US media reported.
Filming for Top Gun: Maverick started at the end of May. It is being directed by Joseph Kosinski, who also directed the Tron sequel in 2010.
Kilmer appeared to confirm last year that he had cancer, and that he was "healing".
Cruise posted a photo on Twitter last week, referring to the first day of returning to the role of United States Naval Aviator Lieutenant Pete "Maverick" Mitchell.
According to Variety, Cruise's character is now an instructor exploring "a world of drone technology, fifth-generation fighters and the end of the era of dog-fighting".
No other plot details for the film, written by Eric Warren Singer, Peter Craig and Justin Marks, have been released yet.
In the 1986 original, Maverick and Iceman initially clashed as bitter rivals at the Navy's Fighter Weapons School.
Kilmer wrote on Facebook, back in 2015, that he had been offered a role in the sequel, saying: "Not often you get to say yes without reading the script."
He had also teased his return last year, posting a picture on Twitter that showed him in a Top Gun T-shirt.
The Wrap first reported the news of Kilmer's role, later confirmed by The Hollywood Reporter. The sequel is set for release next year.