Colin Powell's told an audience at his alma mater, City College of New York, on Monday that "the Iranian people want their freedom back".
He said: "They do not want to banish Islam from their lives. Far from it. They want to be free of those who have dragged the sacred garments of Islam into the political gutter."
Powell said the country's rulers should have read the signs last month when Iranians greeted Nobel Peace Prize winner Shirin Ebadi on her return from abroad with the prize.
"They (the Iranian people) do not want to banish Islam from their lives... They want to be free of those who have dragged the sacred garments of Islam into the political gutter"
US Secretary of State
"We all know what this means. The hidebound clerics of Iran know what it means too. Should they be worried? Does morning follow night? They should be," Powell added.
His comments came after Iran temporarily halted its uranium enrichment programme and agreed to stop nuclear inspections.
Iran has been under intense US-led pressure to come clean over its nuclear programme, despite the fact that America possesses the world's largest stockpile of nuclear weapons.
The US alleges that Iran is trying to build a nuclear bomb, but the Iranians say their atomic programme is entirely peaceful.
They also reject accusations that their government is illegitimate, and say they have the most free and most representative society in the region.