He held talks with President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif on Monday, and is set to meet Majlis Speaker Ali Larijani during his two-day stay, ISNA reported.
Zarif and the top EU diplomat discussed the nuclear deal, as well as regional and international developments.
Before his trip, Borrell had said in a statement that the visit would be an opportunity to look for de-escalation of tensions by exploring political solutions and convey EU's strong commitment to preserve the nuclear deal, known as the Joint Comprehensive Plan of Action.
JCPOA is on the verge of collapse as the United States has already pulled out of it and reimposed sanctions.
Iran subsequently reduced its compliance because the European parties' efforts to offset the effects of American economic restrictions were in vain over the course of more than a year.
Europe urged Iran to return to compliance after each step of its plan to scale back its commitments.
Following the final phase of the rollback in mid January, the EU referred Iran's compliance issue to the JCPOA Joint Commission under the deal's dispute resolution mechanism that could end up in the United Nations Security Council with a so-called "snapback" of global sanctions on Tehran.
However, in late January, the EU extended the time available under the mechanism for discussions due to the complexity of the issues involved.
"There is agreement that more time is needed due to the complexity of the issues involved. The timeline is, therefore, extended," Borrell had said in a statement.
Iran's Foreign Ministry spokesman said in a regular press briefing on Monday that the snapback process was not initiated due to Iran's explanations and reasoning.
"Mr. Zarif wrote a 14-page legal letter to Mr. Borrell and questioned Europeans' arguments," Abbas Mousavi was quoted as saying by IRNA.
He said the talks would be frank and straightforward, and hoped Europeans would follow Iran's reasoning and take serious measures to defuse tensions if they intend to act in good faith.
Iran insists that the party eligible to trigger the dispute mechanism under Article 36 of JCPOA was undeniably and evidently the Islamic Republic.
"They [the European parties] have committed significant non-performance of JCPOA and the Islamic Republic took the remedial measures of Article 36," Zarif told reporters on the sidelines of a university event on Monday morning.
Mousavi stressed that Europe has no right to use Article 36 that allows one party to refer the issue to the Joint Commission when the other side is deemed out of compliance.
Iran says it has already triggered and exhausted the dispute mechanism and began to reduce its compliance as per JCPOA provisions after the issue remained unsolved.
"In 14 pages and in detail, with both scripts and figures, we have shown what a clear mistake they have made," Zarif said.
Europe vowed to make up for US sanctions after Washington's exit, but fell short of fulfilling its pledge to protect Iran's economy.
It launched a mechanism known as INSTEX (Instrument in Support of Trade Exchanges) to facilitate trade between Iran and the EU, but that has only remained on paper so far.
"We established the INSTEX corresponding organization in Iran and the two entities are in connection … It is now up to Europe to take a practical step … Iran is ready to run the [payment] channel," Mousavi said.