But the United States insisted it was already allowing humanitarian exemptions to sanctions and, accusing Iran of seeking a "propaganda" win, announced it was terminating a treaty on which the case was based. The judges at the court in The Hague ruled unanimously that sanctions on some goods breached the 1955 Treaty of Amity between Iran and the United States that predates Iran's Islamic Revolution.
They called on Washington to "remove by means of its choosing any impediments arising from the measures announced on 8 May to the free exportation to Iran of medicines and medical devices, food and agricultural commodities" as well as airplane parts and services, chief judge Abdulqawi Ahmed Yusuf said.
The court said sanctions on goods "required for humanitarian needs... may have a serious detrimental impact on the health and lives of individuals on the territory of Iran."
US sanctions also had the "potential to endanger civil aviation safety in Iran." Trump slapped a first round of sanctions on Iran in August after pulling out in May from the 2015 international deal aimed at curbing Tehran's nuclear ambitions, to the dismay of his European allies. A second round of punitive measures is due in November.
Iran dragged the United States to the ICJ in July, and during four days of hearings in late August, its lawyers accused Washington of "strangling" its economy.
Foreign drugs are now a rare commodity in Iran which is also dealing with a free-falling rial currency and price hikes. Official Iranian statements acknowledge the shortage and say imports of certain drugs are no longer subsidised.
Iranian Foreign Minister Mohammad Javad Zarif called the court ruling "another failure for sanctions-addicted US government and victory for rule of law".
The foreign ministry said in a statement that the ruling was a "clear sign" that "Iran is in the right".
But US Secretary of State Mike Pompeo accused Iran of "abusing the ICJ for political and propaganda purposes" and noted that the court did not reject US sanctions more broadly.
"The court's ruling today was a defeat for Iran. It rightly rejected all of Iran's baseless requests," Pompeo told reporters in Washington.
He said that the United States was ending the 1955 friendship treaty, signed when Iran was ruled by the Western-oriented shah.
"This is a decision, frankly, that is 39 years overdue," Pompeo said, referring to the time since the 1979 Islamic revolution transformed Iran from one of the closest US allies to a sworn foe.
"Given Iran's history of terrorism, ballistic missile activity and other malign behaviours, Iran's claims under the treaty are absurd," he said.
The end of the treaty will have little direct effect but Iran has repeatedly cited it to seek claims against the United States, including when the US Navy downed an Iran Air civilian flight in 1988, killing 290 people.