The Institute for Science and International Security (ISIS) said on its website that Iran was now using a second set, or "cascade," of centrifuge machines at its Natanz pilot plant. It did not disclose the source of its information.
Iran has been producing low-enriched uranium for some time and announced in February that it had started enriching uranium to a higher, 20 percent, level to make fuel for a medical research reactor.
Analysts said the single cascade of machines Iran was using for the higher-level enrichment was inefficient because it left over a large quantity of low-enriched uranium alongside the highly enriched material.
The International Atomic Energy Agency, the UN nuclear watchdog, said Iran had subsequently installed a second cascade of centrifuge machines but had not begun using it.
A Vienna-based diplomat with knowledge of the IAEA investigation of Iran's nuclear program said the Iranians had been preparing the second cascade of machines for use in recent weeks.
Use of the second cascade allows leftover material to be re-fed into the machines more easily, obtaining its full potential and making the work more efficient.
"ISIS has learned that Iran is now using the second cascade at the Pilot Fuel Enrichment Plant (PFEP) at Natanz to recycle the tails from the first cascade," ISIS said in its note.
ISIS said the use of the second cascade meant the plant now needed less low-enriched uranium (LEU) than before to produce the same amount of 20-percent enriched uranium. It did not mean the output or enrichment level would increase, ISIS said.
Western powers fear the Islamic Republic aims to stockpile material for possible use, when still more highly enriched, in nuclear weapons. Iran says its aims are purely peaceful.
Western diplomats have said in the past that the second cascade could be reconfigured to enrich uranium to the higher level needed for use in nuclear weapons, a concern echoed by ISIS.
"If Iran enriches to weapon-grade uranium, however, it is expected to use the same type of procedure," ISIS said.
"Thus, Iran's current actions, while superficially justified on civil grounds, mainly make sense in the context of learning how to make significant quantities of highly enriched uranium efficiently."
Tehran has said it was forced to enrich uranium to 20 percent purity after the breakdown of a deal with Western powers and the IAEA, under which it would have sent 1,200 kg of its low-enriched uranium abroad in return for fuel rods for its medical reactor.
It tried to revive the fuel swap in a deal with Turkey and Brazil days before a key UN Security Council meeting in June, but the deal did not prevent the Security Council from imposing a fourth round of sanctions on Iran over its disputed nuclear program.
