Iran said it had put a dummy satellite into orbit on a home-grown rocket for the first time today - a move likely to increase Western concerns about its nuclear ambitions.
The ballistic technology used to put satellites into space can also be used for launching weapons, although Iran says it has no plans to do so.
"The Safir (Ambassador) satellite carrier was launched today and for the first time we successfully launched a dummy satellite into orbit," Reza Taghizadeh, head of the Iranian Aerospace Organisation, told state television.
Iran, embroiled in a standoff with the West over Tehran's disputed nuclear ambitions, caused international concern in February by testing another domestically made rocket as part of its satellite programme, the Explorer 1.
The West accuses Iran of trying to obtain nuclear arms under cover of a civilian programme. Iran, the world's fourth largest oil producer, insists it needs nuclear technology to generate electricity.
Iranian President Mahmoud Ahmadinejad was present at Iran's space centre and read out the launch countdown, state television reported. "The president congratulated the Iranian nation on the great achievement," it said.
Iranian television showed the rocket on its desert launch pad, but did not show the actual lift-off. Few details were available about the rocket or its payload.
Washington has accused Iran of trying to equip its missiles with nuclear warheads.
Iran has missiles that can reach 2,500 km (1,250 miles), meaning it could hit Israel or US military bases in the Gulf.
The UN Security Council has imposed three rounds of sanctions on Iran for defying demands that it suspend its uranium enrichment programme.