The man, identified as Ali-Jan Moradi, was hanged in public in the town of Iran-Shahr.
He was accused of drug smuggling.
Iranian authorities routinely execute dissidents on the bogus charge of drug smuggling.
Sistan-va-Baluchistan Province is home to Baluchis, a predominantly Sunni Muslim ethnic minority.
Iran has witnessed escalating unrest since 2006 in areas populated by Baluchis, who complain of discriminatory and repressive policies by the theocratic regime.
In recent months, Iranian authorities have stepped up executions in the restive province in what many Baluchis believe is a response to a spate of attacks by dissidents on government and security officials.
