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The Pahlavi dynasty was the ruling dynasty of Iran from 1925 to 1979, from which two Shahs were drawn.
In 1921 Reza Khan (later Reza Shah Pahlavi), an officer in Iran's only military force (Cossack Brigade) used his troops to support a coup against the government of Qajar dynasty. Within four years he had established himself as the most powerful person in the country by suppressing rebellions and establishing order. In 1925 a specially convened assembly deposed Ahmad Shah Qajar, the last ruler of the Qajar dynasty, and named Reza Khan, who earlier had adopted the surname Pahlavi, as the new shah.
Reza Shah had ambitious plans for modernizing Iran. These plans included developing large-scale industries, implementing major infrastructure projects, building a cross-country railroad system, establishing a national public education system, reforming the judiciary, and improving health care. He believed a strong, centralized government managed by educated personnel could carry out his plans.
He sent hundreds of Iranians including his son to Europe for training. During 16 years from 1925 and 1941, Reza Shah's numerous development projects transformed Iran into an industrial, urbanized country. Public education progressed rapidly, and new social classes were formed. A professional middle class and an industrial working class had emerged.
By the mid-1930s Reza Shah's dictatorial style of rule caused dissatisfaction in Iran. In 1935 the country's name was changed from Persia to Iran.
Reza Shah tried to avoid involvement with Britain and the Union of Soviet Socialist Republics (USSR; formed from the Russian Empire in 1922). Even though many of his development projects required foreign technical expertise, he avoided awarding contracts to British and Soviet companies. Although Britain, through its ownership of the Anglo-Iranian Oil Company, controlled all of Iran's oil resources, Reza Shah preferred to obtain technical assistance from Germany, France, Italy and other European countries. This made problems for Iran after 1939, when Germany and Britain became enemies in World War II. Reza Shah proclaimed Iran as a neutral country, but Britain insisted that German engineers and technicians in Iran were spies with missions to sabotage British oil facilities in southwestern Iran. Britain demanded that Iran expel all German citizens, but Reza Shah refused, claiming this would adversely impact his development projects.
Following Germany's invasion of the USSR in June 1941, Britain and the Soviet Union became allies. Both turned their attention to Iran. Britain and the USSR saw the newly opened Trans-Iranian Railroad as an attractive route to transport supplies from the Persian Gulf to the Soviet region. In August 1941, because Rza Shah refused to expel the German nationals, Britain and the USSR invaded Iran, arrested him and sent him into exile, taking control of Iran's communications and coveted railroad. In 1942 the United States, an ally of Britain and the USSR during the war, sent a military force to Iran to help maintain and operate sections of the railroad. The British and Soviet authorities allowed Reza Shah's system of government to collapse and limited the constitutional government interfaces. They permitted Reza Shah's son, Mohammad Reza Pahlavi to succeed to the throne.
In January 1942 they signed an agreement with Iran to respect Iran's independence and to withdraw their troops within six months of the war's end. In 1943 at a Tehran Conference, the United States reaffirmed this commitment. In 1945, the USSR refused to announce a timetable to leave Iran's northwestern provinces of East Azerbaijan and West Azerbaijan, where Soviet-supported autonomy movements had developed.
The USSR withdrew its troops in May 1946, but tensions continued for several months. This episode was one of the precipitating events of the emerging Cold War, the postwar rivalry between the United States and its allies, and the USSR and its allies.
Iran's political system became increasingly open. Political parties were developed, and in 1944 the Majlis election was the first genuinely competitive election in more than 20 years. Foreign influence remained a very sensitive issue for all parties. The Anglo-Iranian Oil Company (AIOC), which was owned by the British government, continued to produce and market Iranian oil. In the beginning of 1930s some Iranians began to advocate nationalization of the country's oil fields. After 1946 this became an increasingly popular political movement.
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