"The people of Iran are finally acting against the brutal and corrupt Iranian regime," Trump tweeted, a day after calling for regime change in the Islamic republic.
"All of the money that President Obama so foolishly gave them went into terrorism and into their 'pockets.' The people have little food, big inflation and no human rights. The US is watching!"
The comments were Trump's latest hint of a possible US withdrawal from the 2015 nuclear deal between Iran and six world powers - Britain, China, France, Germany, Russia and the United States - that was a signature foreign policy achievement of the Obama administration.
Trump has been vocal on Twitter about the protests in Iran since they erupted last week.
On Monday, he said it was "time for change" in Iran and that the country's people were "hungry" for freedom.
In response to Trump's latest Twitter attack, Iran's foreign ministry said the US president should focus on "homeless and hungry people" in his own country rather than insulting Iranians.
"Instead of wasting his time sending useless and insulting tweets regarding other countries, he would be better off seeing to the domestic issues of his own country such as daily killings of dozens of people... and the existence of millions of homeless and hungry people," said ministry spokesperson Bahram Ghasemi.
Iranian President Hassan Rouhani has hit back at Trump's comments, saying the US leader - whose "whole being is against the nation of Iran - has "no right" to sympathise with protesters.
Protests began in Iran's second largest city Mashhad and quickly spread to become the biggest challenge to the Islamic regime since mass demonstrations in 2009.
Iranian officials have said online accounts in the United States, Britain and Saudi Arabia are fomenting protests, which Iran's supreme leader Ayatollah Ali Khamenei blamed on the country's "enemies".