The Trump administration on Friday imposed sanctions on 25 individuals and entities, ratcheting up pressure on Iran in what it said were just "initial steps."
The move came days after the Trump administration had put Tehran "on notice" over a recent ballistic missile test-launch.
"Iran has a choice to make. We are going to continue to respond to their behaviour in an ongoing way, at an appropriate level to continue to pressure them to change their behaviour," a senior administration official told reporters.
"These are just initial steps in response to Iranian provocative behaviour," the official said on a conference call, suggesting more could follow if Tehran does not curb its ballistic missile programme and continues support in regional proxy conflicts.
The administration was "undertaking a larger strategic review" of how it responds to Iran.
Those affected by the sanctions cannot access the US financial system or deal with US companies and are subject to "secondary sanctions." This means that foreign companies and individuals are prohibited from dealing with them or risk being blacklisted by the United States.
The White House said that while the sanctions, the first actions against Iran by the US government since President Donald Trump took office, were a reaction to recent events, they had been under consideration before.
Though the measures are similar to actions taken by the Obama administration targeting Iran's ballistic missile network and the elite Islamic Revolutionary Guard Corps, the White House said they were just opening shots in plans to go after Iran and that a landmark 2015 deal to curb Iran's nuclear programme was not in the best interest of the United States.
Iranian Foreign Minister Mohammad Javad Zarif tweeted on Friday ahead of the announcement that Iran was "unmoved by threats".
Iran unmoved by threats as we derive security from our people. We'll never initiate war, but we can only rely on our own means of defense. pic.twitter.com/TxlSEL8rjj
— Javad Zarif (@JZarif) February 3, 2017
The new designations stuck to areas that remain under sanctions even with the 2015 nuclear deal sealed between Iran and world powers in place, such as the Revolutionary Guards, an elite military body that is powerful in Iranian politics and the economy, and Iran's ballistic missile programme.
Zarif led Iran's delegation at the nuclear negotiations in 2015.