The Hoot torpedo has been tested over the past decade, with the most recent test taking place in February, 2015. It is believed it is able to reach a speed four times faster than the top speed of traditional torpedoes.
According to the U.S. official, the torpedo was tested on Sunday in an area directly south of Bandar Abbas, home to an Iranian naval base located along the Strait of Hormuz.
Sunday's test appeared to be a speed test given that it was not aimed at a target barge.
A torpedo moving at such a high rate of speed would require a sophisticated guidance system to accurately strike its target. The torpedo is believed to have a range of six miles.
Last week, Iran attempted a submarine-launched cruise missile test east of the Strait of Hormuz, but U.S. officials said the test had failed.
Though the waterway is narrow and is a congested international shipping lane, Iran will test new military technologies in territorial waters hugging its coastline.
Disputes between Iranian small boats and American naval ships operating in the Strait of Hormuz or the Persian Gulf are not uncommon.