Ayatollah Ali Khamenei 'ssaid what he called a "resistant economy" can effectively counter the sanctions.
This month, the European Union enforced a ban on oil imports from Iran ,after the US stepped up its banking sanctions.
The sanctions aim to force Iran to stop enriching uranium. The West suspects Iran is aiming to build nuclear weapons. Iran denies that.
Khamenei said Iran should stop selling raw materials, including oil, and instead promote "knowledge-based companies which can make a resistant economy more sustainable."
He gave no timetable or details of what would amount to a total overhaul of Iran's economy.
Khamenei's remarks were broadcast on state TV Sunday night.