Iran says it has produced 17kg (37lb) of uranium enriched to 20%, in defiance of United Nations efforts to halt its nuclear programme.
The head of Iran's Atomic Energy Organisation said the country could now produce up to 5kg every month.
There has been no independent verification of the claims.
Iran says the fuel is needed to power a medical research reactor, but Western powers accuse Tehran of trying to develop nuclear weapons.
The announcement by Ali Akbar Salehi, who heads the atomic energy body and is also the Vice-President of Iran, adds another element to the row between Iran and the UN over its disputed nuclear programme.
On Monday, Iran barred two inspectors from the UN nuclear watchdog - the International Atomic Energy Agency (IAEA) - from entering the country, saying they had published an "untruthful" report.
All this comes the wake of a fourth round of UN sanctions imposed just two weeks ago and even tougher measures announced by both the US and the European Union.
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