President Donald Trump has announced that the US is designating Iran's Revolutionary Guard as a "foreign terrorist organisation", in an effort to increase pressure on the country.
It is the first time the US has designated a part of another country as a terrorist organisation.
The designation imposes sanctions that include freezes on assets the Islamic Revolutionary Guard Corps may have in US jurisdictions and a ban on Americans doing business with it.
Mr Trump said in a statement: "This unprecedented step, led by the Department of State, recognises the reality that Iran is not only a State Sponsor of Terrorism, but that the IRGC actively participates in, finances, and promotes terrorism as a tool of statecraft."
Iran has threatened to retaliate for the decision.
The designation allows the US to deny entry to people found to have provided the Guard with material support or prosecute them for sanctions violations.
That could include European and Asian companies and business people who deal with the Guard's many affiliates.
It will also complicate diplomacy.
Without exclusions or waivers to the designation, US troops and diplomats could be barred from contact with Iraqi or Lebanese authorities who interact with Guard officials or surrogates.
The Pentagon and US intelligence agencies have raised concerns about the impact of the designation if the move does not allow contact with foreign officials who may have met with or communicated with Guard personnel.
Those concerns have in part dissuaded previous administrations from taking the step, which has been considered for more than a decade.