Unemployment was lowest in Germany, at 4.7 percent and in Malta, at 5.1 percent.
By comparison, unemployment in the U.K. (which is not a member of the euro zone) read 5.6 percent in July, while U.S. unemployment stood at 5.3 percent.
The unemployment figures were released after slightly disappointing data for euro zone factory activity growth. Markit's final Purchasing Managers' Index (PMI) registered 52.3 in August, lower than flash estimates of 52.4 and below the reading of 52.4 in July. A PMI reading above 50 does, however, indicate growth rather than contraction.
Jessica Hinds, a European economist for Capital Economics, warned it might be too soon for the euro zone to celebrate.
"July's renewed fall in euro zone unemployment offers some hope that the slow recovery in the region's labor market has not gone into reverse," she said in a research note on Tuesday.
"However, we do not expect the euro zone's labor market recovery to gain much pace in the coming months."
She went onto highlight the slow PMI growth and disparate unemployment readings across the region.
"Across much of the region, there remains plenty of slack in the labor market, which will keep wage growth contained and certainly far too slow to provide the necessary boost to euro zone inflation."