"The footage released by the US Navy was compiled using file pictures and the audio has been fabricated," the state-run English-language channel Press TV quoted an official in the Revolutionary Guards as saying on Wednesday.
The state-run Al Alam Arabic language channel also ran a similar denial quoting a source from the country's elite military force.
Iran's foreign ministry has played down the incident as routine and suggested that the boats had not recognised the US vessels.
"That is something normal that takes place every now and then for each party," Mohammed Ali Hosseini, a spokesman, told the state news agency Irna on Tuesday.
In the Pentagon video, the Iranian boats appeared to ignore repeated warnings from the US ships, including horn blasts and radio transmissions, as the ships moved through the Strait of Hormuz into the Gulf.
From the Hopper's bridge, after spotting the approaching Iranian boats, a navy crew member says over the radio: "This is coalition warship. I am engaged in transit passage in accordance with international law. I intend no harm. Over."
Often uneven and shaky, the video condenses what US navy officials have said was a 20-minute confrontation early on Sunday between three navy warships and five Iranian fast boats.
It ends with a blank screen, as only the audio of the navy's final warning can be heard, just after the voice apparently from one of the small boats warns that "I am coming to you".
"Inbound small craft: You are approaching a coalition warship operating in international waters. Your identity in unknown; your intentions are unclear," the unidentified US navy crew member says.
He then cautions the Iranians that if they do no steer clear they will be "subject to defensive measures".
"Request that you alter course immediately to remain clear," the crew member says.
After a pause, the voice over the radio issues a final threat: "You will explode after [indecipherable] minutes."
A navy crew member then repeats the threat he has heard, saying: "You will explode after a few minutes?"'Provocative act'
The US president has warned Iran of "serious consequences" if it attacked US ships in the Gulf, and said that all options were on the table.
"My advice to them is don't do it," George Bush said at a news conference in Israel on Wednesday.
"We have made it clear publicly and they know our position, and that is there will be serious consequences if they attack our ships, pure and simple."
Earlier, Stephen Hadley, Bush's national security adviser, said Iran must bear the consequences of any further confrontations.
"This was a very provocative act by the Iranians and could have and came very close to resulting in an altercation between our forces and their forces," he said.
"It's the kind of incident that can provoke exchange of fire and we think the Iranians need to be on notice that they are fishing in troubled waters here."
The audio and video recordings were made separately, but were pulled together by the US navy.
US military officials, including Vice-Admiral Kevin Cosgriff, the most senior US navy commander in the Gulf, cautioned that they had not been able to definitively connect the radio call with one of the Revolutionary Guards boats.