"That said, I think it's very important as we deal with Iran that we don't take any options, including military options, off the table," Mullen told Fox News.
But the top commander declined to say whether the danger posed by a nuclear-armed Iran would be sufficient to outweigh the negative consequences of a US military strike on Tehran's weapons program.
"I think both outcomes are really, really bad outcomes. And that speaks to the very narrow space that we have to try to resolve this so that neither one of those things occur," he said.
US President Barack Obama pledged during his election campaign to open dialogue with Tehran, but the violent crackdown on Iranian protesters angered by a disputed presidential election appear to have put that plan on hold.
Mullen said decisions about the future of US-Iranian engagement are "for the (US) president to make."
The international community remains at odds with Tehran over its uranium enrichment program, which Iran says is intended for civilian nuclear energy but has aroused suspicion and concern worldwide.
"I worry about the proliferation of the technology. I worry about other countries thinking in the region they might have to have that capability," Mullen said in a separate interview on CBS News.
"It's something I'm engaged with my... Israeli counterpart on regularly," he added.
Israel, which is believed to be the only nuclear-armed country in the Middle East, has expressed frequent concern about Iran's nuclear program, in part because of Tehran's aggressive stance against the Jewish state.
Mullen said the US has a number of other grievances against Iran, repeating a number of longstanding accusations.
"I remain very concerned about what Iran is doing. They continue to state sponsor terrorism... They are and have been a destabilizing force in both Iraq and Afghanistan," the commander said.
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