Iraq was removed from the list after assurances from the Iraqi government of increased information sharing with the US, a senior Department of Homeland Security official told reporters on Monday.
Visas revoked because of the original travel ban have been fully restored, according to the State Department.
"To our allies and partners around the word, please understand this order is part of our ongoing efforts to eliminate vulnerabilities that radical Islamic terrorists can and will exploit for destructive ends," Secretary of State Rex Tillerson said after the executive order's signing.
Tillerson, Homeland Security Secretary John Kelly and Attorney General Jeff Sessions unveiled the order in front of reporters.
The directive includes a 120-day ban on all refugees.
A three-judge panel from the Ninth US Circuit Court of Appeals had in early February ruled unanimously to uphold a federal judge's restraining order on the travel ban, delaying the executive order's implementation.
Kelly said the US needed a "rigorous review" of visa and refugee programmes. "We cannot risk the prospect of malevolent actors using our immigration system to take American lives," he said.
The earlier order had sparked chaos at airports around the world as airlines refused to let passengers with visas on to flights bound for the US.
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