Iran says a decision by the US to impose sanctions on the head of its judiciary has "crossed a red line".
The foreign ministry vowed to retaliate, but did not say what form such action might take.
Ayatollah Sadeq Amoli-Larijani was among 14 individuals and entities targeted over alleged rights abuses.
It came as US President Donald Trump declared he would extend sanctions relief for Iran over its nuclear deal one last time.
He said he was giving Europe and the US "a last chance" to fix "terrible flaws" in the 2015 landmark agreement.
The White House wants EU signatories to agree permanent restrictions on Iran's uranium enrichment. Under the current deal they are set to expire in 2025.
Although the US has suspended sanctions against Iran following the nuclear deal, it still imposes punitive measures over issues such as terrorism, human rights and ballistic missile development.
The US Treasury said Ayatollah Amoli-Larijani was responsible for the torture and degrading treatment of prisoners.
He was among those who had called for a crackdown following a recent spate of anti-government protests in Iranian cities.
"The Trump regime's hostile action (against Larijani)... crossed all red lines of conduct in the international community and is a violation of international law and will surely be answered by a serious reaction of the Islamic Republic," the Iranian foreign ministry said in a statement.
It accused Mr Trump of "continuing to take hostile measures against the Iranian people and repeating the threats that have failed many times".
Mr Trump has repeatedly criticised the nuclear deal - reached under his predecessor Barack Obama - as "the worst ever".
The waiver he will sign suspends sanctions for another 120 days but he warned that if a new agreement was not made "the United States will not again waive sanctions".
"If at any time I judge that such an agreement is not within reach, I will withdraw from the deal immediately," he said.
Iran's Foreign Minister Mohammad Javad Zarif said it was a "desperate attempt" to undermine a "solid" deal.
Germany said it would continue to call for the deal's full implementation and would consult on a "common way forward" with the UK and France.
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