The growth of Iran's agricultural sector in the past few decades has exerted enormous pressure on its aquifers. There is a strong disparity between economic development and natural resource endowments, which threatens water and food security. In this paper, we used a multiregional input-output (MRIO) framework to assess the virtual water flows in Iran. We also estimate the internal and external water footprint of regions compared to their water availability. The results show that the northern part of the country, with no water scarcity, imported virtual water through the trade of goods and services, while severely water-scarce regions were net virtual water exporters. Iran had a net export of 1811 Mm3 per annum. While blue water resources (surface and groundwater) accounted for 92.2% of the national water footprint, 89.1% of total exports were related to the agriculture sector, contributing to only 10.5% of the national income. The results suggest that policy-makers should reconsider the current trade policy regarding food production liberalization in order to make Iran's limited water resources available for producing industrial goods, which can contribute more to the economy.