Bolivia is high on the list of Latin America countries Iran has carefully cultivated as part of an effort to forge links with nations that either agree with Tehran or disagree with Washington on key issues.
Bolivia's relations with the Obama administration remain strained over Bolivian accusations of U.S. interference in internal affairs, which U.S. officials dismiss.
Instead, U.S. officials say, reconciliation has remained elusive because of Bolivian reluctance to heed U.S. advice on the international fight against narcotics smuggling to North America.
Ahmadinejad received a warm reception at the airport from Bolivian President Evo Morales before the two drove to the presidential place for talks.
Bilateral cooperation has benefited Bolivia and official estimates put the current value of economic exchanges at more than $1 billion, including projects in farming, mining, oil and natural gas and healthcare.
Iran has offered its mining expertise to develop lithium deposits at Bolivia's Salar de Uyuni, the world's biggest deposit of the mineral used in aircraft manufacture, laptop computer and electric car batteries.
The project has been discussed for nearly two years but its current status remains unclear.
Analysts said Iran viewed Bolivia with increased strategic interest because of the uncertain direction of its future relationship with Venezuela, another of its staunch supporters along with Nicaragua.
Venezuelan President Hugo Chavez is fighting cancer and is generally seen as a revolutionary figure likely to recede from Venezuela's political scene amid failing health and fierce power struggles between the military, Chavez cronies and an increasingly outspoken but divided opposition.
Ahmadinejad stood alongside Morales as he told a Bolivian audience, "The long age of colonial exploitation is the result of the attitude and actions of greedy governments and states that want to stop others from developing, and from exercising freedom."
He hailed Bolivia and Iran as "two sovereign and independent countries with very old civilizations" who have "decided to stand on our own feet."
Iran is campaigning for international support amid faltering international negotiations on its disputed nuclear program and the scheduled start July 1 of a tough new European Union embargo on Iranian oil trade.
The embargo has been criticized by Venezuela and is receiving mixed reaction from developing nations gathered in Rio de Janeiro for the Rio+20 talks, also known as the Earth Summit.