Residents of Okanogan had been stunned to see the F-18 jet scrawling the phallic symbol on Thursday, and several photos quickly circulated online.
Navy officials acknowledged one of their crews was behind the stunt, saying the aircraft "left a condensed air trail resembling an obscene image to observers on the ground."
"The actions of this aircrew were wholly unacceptable and antithetical to Navy core values," Lieutenant Commander Leslie Hubbell, a spokeswoman for the Naval Air Station on Whidbey Island, said in a statement.
"We have grounded the aircrew and are conducting a thorough investigation- and we will hold those responsible accountable for their actions.
"The Navy apologises for this irresponsible and immature act," she added.
Many onlookers on the ground posted images of the drawing on social media and appeared amused by the stunt.
Ramon Duran told The Spokesman-Review that he was running errands when he noticed the jet drawing the male genitalia.
"After it made the circles at the bottom, I knew what it was and started laughing," Duran said.
"It was pretty funny to see that. You don’t expect to see something like that."
Photos of the sky drawing in question can be seen at: http://u.afp.com/4j7F