Washington concerned long-range ballistic technology could also be used to launch nuclear missiles
The rocket carrying the Payam satellite failed to reach the "necessary speed" in the third stage of its launch, Mohammad-Javad Azari Jahromi told Iranian state television.
Mr Jahromi said the rocket had successfully passed its first and second stages before developing problems in the third. He did not elaborate on what caused the rocket failure, but promised that Iranian scientists would continue their work.
It came after Iran ignored US warnings to avoid undertaking three planned rocket launches Washington said would violate a UN Security Council resolution because they use ballistic missile technology.
The US is concerned the long-range ballistic technology used to put satellites into orbit can also be used to launch missiles capable of carrying nuclear warheads.