Iran took a "big step" towards sending astronauts into space by 2020, successfully launching a monkey above the Earth's atmosphere, Defence Minister Ahmad Vahidi told state television.
Washington however said if the report on the launch was true, then Iran might have violated a UN resolution banning it from any activity relating to ballistic missile technology.
Arabic-language channel Al-Alam and other Iranian news agencies said the monkey returned alive Monday after travelling in a capsule to an altitude of 120 kilometres (75 miles) for a sub-orbital flight.
"This success is the first step towards man conquering the space and it paves the way for other moves," General Vahidi said, but added that the process of putting a human into space would be a lengthy one.
"Today's successful launch follows previous successes we had in launching (space) probes with other living creatures (on board)," he said, referring to the launch in the past of a rat, turtles and worms into space.
"The monkey which was sent in this launch landed safely and alive and this is a big step for our experts and scientists," Vahidi said.
Iranian state television showed still pictures of the capsule and of a monkey being fitted with a vest and then placed in a device similar to a child's car seat.
A previous attempt in 2011 by the Islamic republic to put a monkey into space failed. No official explanation was ever given.
A defence ministry statement quoted by Iranian media said earlier Iran had "successfully launched a capsule, codenamed Pishgam (Pioneer), containing a monkey and recovered the shipment on the ground intact."
It did not give details on the timing or location of the launch.
Iran announced in mid-January its intention to launch a monkey into orbit as part of "preparations for sending a man into space," which it aims to do by 2020.
President Mahmud Ahmadinejad has indicated on several occasions the intention to launch an astronaut for "observation" purposes by Iran's scientists.
In October 2011 a deputy minister for science, Mohammad Mehdinejad-Nouri, said human space flight was a "strategic priority" for the country.
In Washington, State Department spokeswoman Victoria Nuland said she could not confirm whether the launch had really taken place.
But she said: "Our concern with Iran's development of space launch vehicle technologies are obviously well-known.
"Any space launch vehicle capable of placing an object in orbit is directly relevant to the development of long-range ballistic missiles... and they're all virtually identical and interchangeable."
UN resolution 1929 prohibited Iran from any such work, she added.
Iran's space programme deeply unsettles Western nations, which fear it could be used to develop ballistic missiles capable of carrying nuclear warheads they suspect are being developed in secret.
The same technology used in space launch rockets can also be used in ballistic missiles. The Security Council has imposed on Iran an almost total embargo on nuclear and space technologies since 2007.
Tehran has repeatedly denied that its nuclear and scientific programmes mask military ambitions.
Iran's previous satellite launches -- Omid in February 2009, Rassad in June 2011 and Navid in February 2012 -- were met by condemnation from the West which accused Tehran of "provocation".
In mid-May last year, Tehran announced plans to launch an experimental observation satellite Fajr (Dawn) within a week but it did not happen and Iran gave no explanation for the delay.
The Fajr satellite was presented by Iranian officials as "an observation and measurement" satellite weighing 50 kilograms (110 pounds), built by Sa-Iran, a company affiliated to the defence ministry.