The video was timed to the major holiday festival of Nowruz, which means "new day" and marks the arrival of spring.
"So in this season of new beginnings I would like to speak clearly to Iran's leaders," President Obama said in the video. "We have serious differences that have grown over time. My administration is now committed to diplomacy that addresses the full range of issues before us, and to pursuing constructive ties among the United States, Iran and the international community."
The White House said a Farsi subtitled version of the video would be given to select news utlets in the region. The video would also be available online in English and with Farsi captions.
Though President Obama made no specific offers, he said wanted "a future with renewed exchanges among our people and greater opportunities for partnership and commerce."
The holiday Nowruz is not Islamic; Iranians of all religions celebrate the 12-day event. Traditionally, the U.S. president and secretary of state release statements for Nowruz.
Aliakbar Javanfekr, an aide to Iranian President Mahmoud Ahmadinejad welcomed "the interest of the American government to settle differences," but added the U.S. government "should realize its previous mistakes and make an effort to amend them."
"By fundamentally changing its behavior, America can offer us a friendly hand," Javanfekr told Reuters. "Unlimited sanctions, which still continue and have been renewed by the United States, are wrong and need to be reviewed," he said.
Javanfekr singled out U.S. backing for Israel, saying, "Supporting Israel is not a friendly gesture."
Supreme Leader Ayatollah Ali Khamenei said Friday that Iran has shown world powers they cannot block its nuclear progress, but he made no mention of a new message from Obama.
The U.S. and other world powers have long been at loggerheads with Iran over its nuclear program, which Tehran insists is for the peaceful generation of electricity.
Khamenei, who has the final say in all state matters in Iran, has criticized Mr. Obama as merely a continuation of President George W. Bush's policies toward Tehran's enemy, Israel. Khamenei on Wednesday called Israel a "cancerous tumor" that is on the verge of collapse, according to the Associated Press.
Also Friday, Israeli president Shimon Peres issued a similar videotaped message, appealing to "the noble Iranian people on behalf of the ancient Jewish people," the New York Times reported.
"I look at Iran on the one hand with admiration for its history, but on the other hand with grief for what has become of it and in hopes that it will recover," Peres said.
It was unclear how many Iranians would be able to see the video. The AP reported that it was not aired on state television in Iran on Friday. It was likely shown on Farsi-language TV stations beamed in from outside of the country.
Iranians could possibly see the video on the White House Web site, but video sharing sites like YouTube are largely blocked in Iran.
Mr. Obama during presidential campaign signaled a willingness to speak directly with Iran about its nuclear program and hostility toward Israel, a key U.S. ally. At his inauguration, the president said his administration would reach out to rival states, declaring "we will extend a hand if you are willing to unclench your fist."
"This process will not be advanced by threats," President Obama said in his message Friday. "We seek instead engagement that is honest and grounded in mutual respect."
"You, too, have a choice. The United States wants the Islamic Republic of Iran to take its rightful place in the community of nations," the president said. "You have that right, but it comes with real responsibilities, and that place cannot be reached through terror or arms, but rather through peaceful actions that demonstrate the true greatness of the Iranian people and civilization."