The prime minister said Iran was continuing to defy the UN in seeking to develop nuclear weapons "under the cover" of a civil nuclear programme.
If Tehran did not start to co-operate, it must be "isolated", he told MPs.
Mr Brown said he was "shocked" by reports Iran may execute nine more people accused of inciting violence after last year's disputed election.
'Essential action'
He said Tehran had a duty to respect the right of its citizens to peaceful protest.
Facing questions from senior MPs, Mr Brown said he believed the time had come for further sanctions against Iran for its continued defiance of the UN over its nuclear programme.
Iran insists its nuclear activities are peaceful and has refused to halt uranium enrichment programmes.
The International Atomic Energy Authority recently said that 20 years of undeclared nuclear work in the country had undermined international trust in its intentions.
Mr Brown said evidence suggested Iran was developing "materials" whose purpose was clearly not for use in civilian nuclear development.
He said Tehran was defying five UN resolutions and faced a "choice" over whether to co-operate with the international community or face further international action.
"What we now, I think, have to do is accept that if Iran will not make some indication that it will take action that we have got to proceed with sanctions," he said.
"I'm sorry that it has come to that, but I think it's essential that the international community shows that it has strength in this matter by imposing these sanctions."
Mr Brown said a "balance" had to be struck between concerns that sanctions would harm ordinary Iranians and the need to send a clear message to the Iranian leadership, insisting that the international community's fight was not with the Iranian people.
Mr Brown said he believed the EU would agree to take action quickly and then it would be up to the US, Russia and China, in concert with the EU, to decide what further steps would be taken.
The US said last month that Iran faced significant new sanctions unless it "changed course".
Existing sanctions have targeted banks and other firms with close links to the Iranian leadership but China and Russia have blocked more extensive restrictions.
Diplomats suggested on Tuesday that the UK, Germany, France and the US hoped to blacklist Iran's central bank and firms linked to Iran's Revolutionary Guard.
