"We need to have an active and influential presence in space," Mahmoud Ahmadinejad, the president, said in a televised ceremony before the launch.
"Iran took its first step [to establish a presence in space] very strongly, precisely and wisely. Building and launching a satellite is a very important achievement."
The ability to put satellites into orbit could indicate an advance in the country's missile technology.
In November, Iran had built a new missile with a range of 2,000km, adding to the scope of its conventional arsenal.
Western experts say Iran rarely gives enough details to determine how significant its technology advances are.
They say much Iranian technology is based on modifications to equipment supplied by other countries, including China and North Korea.
Space centre launched
Meanwhile, Ahmadinejad inaugurated Iran's first space centre, which includes an underground control station and launch pad which was used to fire Omid into space.
Iran has been pursuing a space programme in the last few years and in October 2005, an Iranian Russian-made satellite was put into orbit by a Russian rocket.
But Omid would be Iran's first home-built probe and the first to be launched in Iran.