Iowa is a key state, and its caucuses kick off presidential voting.
The Republican broke the news on Sunday in an Internet video. It came just hours after Indiana Gov. Mitch Daniels' decision against a bid jolted the GOP race and brought the field into clearer focus.
Pawlenty isn't well known nationally and ranks low in popularity polling.
"Our country is in trouble. I am running for president because I can tackle and fix the budget deficit and debt and get this economy back on track. That's what I did in Minnesota, and that's what I can do for America," he said on Good Morning America.
Pawlenty is casting himself as a straight-talking, truth-telling candidate and seeking to convince a Republican primary electorate searching for a hard-nosed nominee that he's tough enough to take on Obama, the Democratic incumbent.
"President Obama's policies have failed. But more than that, he won't even tell us the truth about what it's really going to take to get out of the mess we're in," Pawlenty said. "I'm going to take a different approach. I am going to tell you the truth."
Among the others vying for the Republican nomination are former House Speaker Newt Gingrich and former Massachusetts Gov. Mitt Romney, who has not yet officially declared his candidacy.
The Associated Press contributed to this story.