The plane, belonging to Taban Airlines, crashed when its engine was reportedly shut down shortly after taking off from International Mehrabad Airport at 9:45 hours local time (0515 GMT) on Sunday.
The plane crashed near the Azadi residential area in northwest of Tehran.
Spokesman of Iran Red Crescent Society confirmed the crash in a telephone call to IRNA.
Hossein Derakhshan said no exact information was available on the cause of the crash, adding that an investigation team was sent to the site of the crash.
The plane was heading to the eastern city of Tabas in South Khorassan province.