Thousands joined rallies in Tehran and other cities, carrying placards that mocked President Donald Trump, wiping their feet on fake dollar bills, and engaging in the usual ritual of burning the US flag.
This year's 39th anniversary fell just hours before Washington was set to reimpose sanctions - including an oil embargo - following its withdrawal from the 2015 nuclear deal earlier this year.
Mohammad Ali Jafari, commander of the Revolutionary Guards, addressed the crowd from the grounds of the former embassy, now known as the "den of spies".
He said "economic warfare" was a final bid by Washington to overthrow the Islamic republic after decades of failed attempts.
"With God's help and the resistance and perseverance of the pious and revolutionary people of Islamic Iran, this last weapon of the enemy - the economic war - which is accompanied by America's widespread media operation against the nation of Iran, will be defeated," Jafari said.
Iranian protesters hold placards mocking US President Donald Trump, Saudi King Salman and Crown
Iranian protesters hold placards mocking US President Donald Trump, Saudi King Salman and Crown Prince Mohammed bin Salman outside the former US embassy in Tehran on Nov 4, 2018. (Photo: AFP/Atta Kenare)
"Never threaten Iran," he warned US President Donald Trump, describing him as America's "strange president".
The seizure of the US embassy by radical students was a key stage in the Islamic revolution of 1979, leading to a 444-day hostage crisis that permanently damaged relations between Washington and Tehran.
The students believed the US would launch a counter-coup to return deposed shah Mohammad Reza Pahlavi to power - similar to the CIA-backed coup that overthrew Iran's elected government in 1953 - unaware that the king was already critically ill with cancer.
Several of the students later regretted the incident, but for the establishment it has become a powerful symbol of Iran's refusal to be dominated by outside powers, the key driving force of the revolution.
Without the attack on the embassy, "the revolution would not have reached its 40th year," said Jafari.
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