A statement from Nike said the company was forbidden from supplying kit to the Iranian team as it prepares for its opening World Cup game.
"US sanctions mean that, as a US company, Nike cannot supply shoes to players in the Iranian National team at this time," Nike said.
"Sanctions applicable to NIKE have been in place for many years and are enforceable by law."
An ESPN report from Moscow said the Nike decision had left Iranian football officials baffled, noting that the US company had supplied the team at the 2014 World Cup in Brazil when similar sanctions were in effect.
Iran coach Carlos Queiroz expressed frustration at the decision.
"Players get used to their sports equipment, and it's not right to change them a week before such important matches," ESPN quoted Queiroz as saying.
The ESPN report said Iran's players had responded to the decision by asking non-Iranian players on their club teams to loan them boots, while others had bought their own from stores.
The Nike moves comes at a time of tense relations between Washington and Tehran, with President Donald Trump last month pulling out of the 2015 Iran nuclear agreement and re-imposing sanctions it had previously waived.
Iran kick off their World Cup campaign on Friday with a Group B clash against Morocco.
Queiroz's side also face Spain and Portugal in the first phase.
