On its Web site, DesbloqueioBr posted a video showing the unlocked handset making a phone call.
In an interview with gadget blog Gizmodo, developer Breno MacMasi said the unlocking process involved modifying the phone's SIM hardware so the International Mobile Subscriber Identity can be overwritten.
The procedure allows iPhone 3G users to makes calls with any compatible GSM carrier, not just ones with which Apple has an exclusive agreement. But users of an unlocked phone wouldn't be guaranteed to have 3G-network access, and Apple could potentially wipe out the hack with a software update.
The company plans to charge between $250 and $375 to unlock a phone, according to reports.
Separately, a group of hackers known as the iPhone Dev Team said they have successfully removed Apple's software controls that prohibit users from installing independent applications. The team posted a video of this "jailbroken" phone, and the team claims users will be able to run Apple-approved applications side-by-side with independent ones.
While there have been 10 million downloads from Apple's App Store since the launch last week, some developers and customers may want to jailbreak their phones to bypass Apple's application restrictions. For example, Apple explicitly prohibits applications that run in the background.
The team said it will be offering the jailbreaking software for free soon, and the final version will also let users use their iPhones on any compatible network.