Iranian TV aired footage which it said showed the satellite launch
Iran says it has successfully launched a rocket capable of carrying its first domestically built satellite.
Officials said only the rocket had been fired, correcting state media reports that the communications satellite itself had been sent into orbit.
The White House voiced concern, saying the technology could also be used for launching weapons.
Tehran has pursued a space programme for years, despite international concern over its nuclear plans.
In February it sent a probe into space as part of preparations for the launch of the satellite.
Footage aired on Irinn (Islamic Republic of Iran News Network) showed the launch of the Safir rocket in darkness.
The presenter said that the satellite launch was a trial which was successful. State and military officials confirmed the launch had taken place.
President Mahmoud Ahmadinejad was at the event, said one report.
In October 2005 a Russian-made Iranian satellite named Sina-1 was put into orbit by a Russian rocket.
Sunday's launch comes amid a long-running dispute over Iran's nuclear activities.
White House spokesman Gordon Johndroe said: "The Iranian development and testing of rockets is troubling and raises further questions about their intentions.
"This action and dual use possibilities for their ballistic missile programme are inconsistent with their UN Security Council obligations."
The US and some European countries have demanded that Iran curtail uranium enrichment - but Iran protests that its purposes are peaceful and says it has a right to continue.