A MOAB is a 21,600-pound, GPS-guided munition that is America's most powerful non-nuclear bomb.
President Donald Trump, who said he authorized the attack, called it a "very, very successful mission".
The Afghanistan-Pakistan border area has tunnel complexes known to be used by ISIS and other terrorist groups operating in and out of Afghanistan.
The bomb is officially known as a GBU-43B, or Massive Ordnance Air Blast (MOAB) weapon, is nicknamed "Mother of All Bombs" as derived from its acronym.
The Afghan Taliban, which is trying to overthrow the USA -backed government in Kabul, are fiercely opposed to Islamic State and the two group have clashed as they seek to expand territory and influence.
This is the first time a MOAB has been used in the battlefield, according to the United States officials.
The U.S. has concentrated heavily on combatting them while also supporting Afghan forces battling the Taliban.
The blast, from the weapon dubbed the "mother of all bombs", destroyed three underground tunnels as well as weapons and ammunition, but no civilians were hurt, said a Defense Ministry spokesman.
USA officials say intelligence suggests Islamic State is based overwhelmingly in Nangarhar and neighboring Kunar province.
ISIS-K refers to ISIS-Khorasan, an ISIS affiliate in Afghanistan that mainly operates in the eastern part of the country.
According to the Air Force, the last time the MOAB was tested in 2003, a huge mushroom cloud could be seen from 20 miles (32 kilometers) away.
The US said it believed the area was so remote that no civilians were in the area.
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PJ Crowley, the assistant secretary of state in the Obama administration, compared the bomb - dropped on a complex of cave and tunnels - to "creating a minor earthquake" in the particular area.
"They were Arabs, Pakistanis, Chinese and local insurgents coming to buy from shops in the bazaar", resident Raz Mohammad said.
On Friday, the village was swarming with Afghan and global troops, as helicopters and other aircraft flew overhead.
The statement said it is the responsibility of Afghans, not the US, to remove the Islamic State group from the country.
The Afghan presidential palace said precautions were taken to avoid civilian casualties.
The Taliban also denounced the bombing.
"I don't know if this sends a message", Trump said when asked if the bomb serves as a warning to North Korea.
A Pentagon spokesman said the bomb was dropped from an MC-130 transport plane.
The arsenal was dropped after fighting intensified over the past week and US-backed ground forces struggled to advance on the area.
The strike follows last week's death of a USA special forces soldier fighting IS militants in Nangarhar Province.
Even the smallest of the United States military's atomic arsenal, the B-61 at its minimum configuration, has an explosive yield roughly 30 times that of the MOAB.