The department's office of foreign assets control "removed the China Great Wall Industry Corporation and its US subsidiary, G.W. Aerospace, from the list of 'specially designated nationals,'" a statement said.
They were included in the list on June 13, 2006.
The department has determined that they "no longer meet the criteria" for being on the list "for providing material support to Iran's missile program".
"Removing China Great Wall Industry Corporation from our sanctions list marks a great success for our counter-proliferation sanctions program," said Adam Szubin, the department's office of foreign assets control.
"A company that once supported Iran's missile program has implemented a rigorous and thorough compliance program to prevent future dealings with Iran," he said.
Washington can freeze the assets of proliferators of weapons of mass destruction and their supporters and isolate them from the US financial and commercial systems, according to an order signed by President George W. Bush three years ago.
The department said it had so far blacklisted 34 entities and 11 individuals tied to Iranian proliferation activity.
Washington is pressing with measures to intercept missile threats from Tehran, especially a missile shield with planned installations in Europe.
The United States is also leading international efforts to pressure Iran to freeze controversial nuclear activities, which the West fears could be used to make a nuclear weapon.
