Thousands gathered at the former US embassy in downtown Tehran where a missile, believed to be 2,000-kilometer range Sejjil, was on display. It was the first time Iran displayed a missile during the annual gathering.
Fifty-two American diplomats and citizens were held hostage for 444 days.
President Donald Trump refused to re-certify the 2015 landmark nuclear deal between Iran and world powers in October and the US has imposed more sanctions on Iran over its ballistic missile programme.