The Navid observation satellite is expected to stay in orbit for 18-months, heightening tensions with western countries.
This is the third Iranian satellite launch since 2009.
Two previously launched satellites remained in orbit two to three months, this one is expected to last 18 months.
Western nations are unsettled as they believe this science program has military applications.
On Friday, Iran launched an observation satellite into Earth orbit -- its third since 2009 -- the official IRNA news agency reported.
"The Navid satellite was launched successfully.... It will be placed into an orbit (at an altitude) between 250 and 370 kilometres," IRNA quoted the head of Iran's Space Organisation, Hamid Fazeli, as saying.
The launch comes as Iran is marking the anniversary of its 1979 Islamic revolution -- and as tensions are heating up over Iran's nuclear program.
The 50-kilogram (110-pound) satellite is meant to stay in orbit for 18 months, sending back images to Iran as it completes a revolution of Earth every 90 minutes. It was unveiled two years ago and its launch had long been expected.
President Mahmoud Ahmadinejad led the launch ceremony, media said.
"It's the beginning of an immense labor... which holds the promise of friendship for all mankind," Ahmadinejad was quoted as saying.
Iran's defense minister, Ahmad Vahidi, said the Navid satellite would beam its images to several ground stations across the country, according to media.
"The telemetric and command stations give and receive data and control the satellite," Vahidi said.
It was the third domestically made satellite Iran has put above the planet using its Safir rockets. The other two observation platforms, launched in February 2009 and July 2011, stayed in orbit for two to three months.
Iran's space program 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.
There is increasing speculation that Israel is considering air strikes on Iranian nuclear facilities -- an action that could possibly spark a broader conflict drawing in the United States.
Tehran, which insists its nuclear program is exclusively peaceful, says its space ambitions include launching seven other satellites in coming years -- and putting an Iranian astronaut into orbit by 2020.
An attempt to put a monkey into a 20-minute orbital flight mid-2011 ended in failure.