"He's going rogue left and right, man," Palin said as she endorsed Trump. "That's why he's doing so well."
Palin provides Trump a key source of support in the race for the Republican nomination as chief rival Ted Cruz tries to cast him as liberal on abortion, same-sex marriage and other issues.
The former Alaska governor and vice presidential nominee is a polarizing figure but has a strong following of evangelicals and tea party supporters.
At the rally in Ames, she hailed Trump's stand against illegal immigration and his aggressive posture toward U.S. adversaries.
"Are you ready for a commander in chief who will let our warriors do their job and go kick ISIS's ass?" Palin asked the cheering crowd at snowbound Iowa State University.
Trump leads national Republican polls by a wide margin but is tied with Cruz in Iowa polls less than two weeks before the state's Feb. 1 caucuses. The Texas senator is trying to emerge as the favorite of evangelicals, a crucial GOP constituency in Iowa and other states, but many have rallied behind Trump.
Cruz suffered another blow Tuesday when Iowa's popular Republican governor, Terry Branstad, said Cruz was "heavily financed by Big Oil" and "could be very damaging to our state." Trump has made the same argument, saying Cruz's opposition to public subsidies for crop-based ethanol fuel threatened Iowa agriculture.
Jamie Johnson, an Iowa Republican operative unaligned in the presidential race, said the combination of Branstad's remarks and Trump's endorsement by Palin, the "queen of the tea party," was a serious blow to Cruz.
"That is enough to tilt the Iowa caucuses," Johnson said.
Cruz, whom Palin backed for Senate in 2012, told reporters in New Hampshire on Tuesday that she was fantastic.
"I will always remain a big, big fan of Sarah Palin," he said.
In an email to reporters, Cruz spokesman Rick Tyler criticized Trump's campaign donations to Democrats and his support for "corporate welfare" and the 2008 bank bailout.
"Conservatives will not win with a candidate who's propped up Democrats and the Washington cartel," Tyler said.
Palin, who has been promoting her new book, "Sweet Freedom," a collection of Bible meditations, came to Trump's defense last month when his call for a temporary ban on Muslims entering the United States sparked a global uproar. She told followers on Facebook that Trump was "committed to clobbering the bad guys, and putting the good guys first."
"Trump's temporary ban proposal is in the context of doing all we can to force the Feds to acknowledge their lack of strategy to deal with terrorism," she wrote.
Finnegan reported from Los Angeles and Mehta from Ames.
MORE POLITICAL COVERAGE