‘The Great Satan’: How the era of the ayatollahs began

It started with the merchants in Tehran’s bazaars. Their anger peaked in late December as Iran’s currency, the rial, slid to an all-time low against the US dollar. Inflation, as ever, was sky-high. Their protests spread. The ruling regime hit back. The crackdowns were brutal: many thousand killed and counting, say human rights groups. Iran’s then-leader, cleric Ayatollah Ali Khamenei, warned, “In the face of those who engage in destruction, the Islamic Republic will not back down.”

By late February, as the US assembled the largest force of its warships and aircraft in the Middle East in decades, President Donald Trump was weighing options for a response. Talks were underway between the US and Iran. Then, a day after the third round of talks ended, the US and Israel attacked. Trump called it “major combat operations”. The Pentagon called it Operation Epic Fury.

Now, amid retaliatory attacks from Iran, including on its Gulf neighbours, the region has descended into turmoil. Ali Khamenei is dead at age 86. One of his sons, Mojtaba Khamenei, 56, has become the third supreme leader of Iran since its 1979 revolution. “We will obey the commander-in-chief until the last drop of our blood,” Iran’s defence council said in a statement.

How did Iran get here? What is behind the enmity between it and America? Who are the ayatollahs? And what is Iran’s Revolutionary Guard Corps?

What happened in the 1979 revolution?

Iran sits at the crossroads of Asia and the West, once the hub of the Silk Road trading route. “Even before oil, gas and other minerals were discovered in substantial quantities in the 20th century,” writes historian Ali Ansari in his book Iran, “European statesmen were acutely aware of the geopolitical significance of the area.”

Today, Iran borders some of the world’s most volatile regions, including Afghanistan and Iraq, from Pakistan in the east to Turkey in the north. Just across the Persian Gulf are the oil and gas-rich Gulf states; Israel is a day’s drive away (border police and bandits permitting) via Iraq and Jordan.

While Iran, or Persia as it is still sometimes called, is somewhat reduced in prestige since the glory days of its ancient rulers, Iranians like to proudly recall how their nation was a crucible for magnificent cultures that outshone anything in the relatively barbaric West. Take Isfahan, Iran’s one-time capital and with a nuclear enrichment site that made it more recently a target.

Built in the 1600s at mind-boggling expense by the Safavid ruler Abbas the First, it was a city of such beauty – intricately tiled mosques, soaring minarets, grand boulevards and water gardens sprinkled with rose petals – that it remains a world-heritage site capable of rivalling Angkor Wat for tourist-pulling power.

We can trace Iran’s contemporary situation to many flashpoints, but we’ll go to 1953 and the event any Iranian simply calls “the coup”. In a nutshell, amid tensions over neocolonial oil revenue, Britain and the US assisted the military in overthrowing the elected prime minister, Mohammad Mosaddegh, and greatly empowered the Shah, Mohammad Reza Pahlavi.

The shah’s rule, supportive of Western oil interests and US anti-communist ideology, was a mixed bag. For a time, the economy grew and the nation modernised. But the shah became increasingly despotic, allowing corruption to flourish, brutally suppressing dissent and indulging in extravagances that, by the 1970s, were stirring unrest, especially among left-leaning secularists, more conservative Muslims and those angered by land reforms that had inflamed social tensions.

Peak “shah” came in 1971, when, to commemorate the 2500th anniversary of the Persian empire, he threw a lavish party in the ancient ruins of Persepolis (now also a World Heritage site). Ingredients and staff came from Maxim’s of Paris: truffles, caviar, partridge, foie gras and 2500 bottles of champagne poured into Baccarat crystals were just the start.

The shah, reported The New York Times, “was in full military uniform, his chest covered with medals. The empress wore a green and white silk ball gown, although it was only 11am, and long white gloves. Some of the emeralds in her 10‐pound [4.5 kilogram] crown were the size of golf balls.” Guests housed in a luxurious tent city included Princess Anne, Princess Grace of Monaco, Ethiopian emperor Haile Selassie, assorted Scandinavian royalty, Richard Nixon’s vice-president Spiro Agnew, and Romanian despot Nicolae Ceausescu. It was quite a gathering.

‘Let them go all the way to Mars or beyond the Milky Way; they will still be ... unable to solve their own social problems.’

Missing from the party: the religious leader Ruhollah Musavi Khomeini, known as the face of Shia Islam, living in exile after being jailed twice for dissent. But he sent his regards. “Let them go all the way to Mars or beyond the Milky Way; they will still be deprived of true happiness, moral virtue and spiritual advancement and be unable to solve their own social problems.”

By the mid-1970s, unrest was growing within Iran, fuelled by supporters of Khomeini. The economy began to falter. The shah, diagnosed with cancer in 1974, then made a series of fatal missteps, including abolishing the multi-party democracy and arranging a bizarre newspaper article that claimed Khomeini was gay, a drug addict, a British spy and Indian, not Iranian – which backfired by triggering violent protests.

Efforts to quash these protests by force only inflamed the situation. In January 1979, he fled the country with his family, never to return. (The shah’s son, former crown price Reza Pahlavi, lives in the US. The shah’s widow, Farah Pahlavi, 87, said in an interview in January 2026 that she still hoped to return to Iran.)

Two weeks later, Khomeini returned to Tehran on a chartered Air France Boeing 747 packed with journalists. “Our culture has been despotism and colonialism,” he declared once he’d made his way through ecstatic crowds. “Everything we had has been thrown to the wind. He, the shah, has made the army follow the orders of another country”, apparently the United States.

Within weeks, Khomeini had sidelined the provisional government and held a referendum to abolish the monarchy in favour of a type of Islamic government that he himself had devised, based on the concept of “velayat-e faqih”, or “the rule of the jurist”. The referendum passed with 98 per cent of the vote. A new era had begun: that of the ayatollahs.

Khomeini had offered the promise of a people-friendly democracy, but he quickly began governing with a much harder line than many of his early supporters had expected, particularly those on the left, whom he lost little time in purging. He would go on to give Islamic clerics almost complete power over government policy, to imprison or execute dissidents, mandate that women wear the hijab headscarf, ban Western music, movies and alcohol, and prohibit men and women from swimming or sunbathing together.

Mojtaba’s mother, his wife and a son died in the military strike that also killed his father.

In 2013-14, British adventurer Lois Pryce took her motorcycle to Iran for a 4500-kilometre journey from Tabriz in the north to southern Shiraz. In her book Revolutionary Road, she recounts a visit to a once-bustling beach resort. “It was easy to see how the Caspian coast would have been the grooviest place to be before the revolution,” she writes, “but the last three decades had taken their toll.” She wondered “if I would ever in my lifetime see Iranians returning to these beaches in their bikinis and Speedos”.

Khomeini put in place a new structure of government topped by himself as the supreme leader (and commander-in-chief of the armed forces) with a president below, an Assembly of Experts clerics and a Council of Guardians to decide who could run in parliamentary elections and which legislation should be struck out for not complying with sharia law. Until recently, the only leader since Khomeini was Ali Khamenei and he had not publicly named a successor. “Khamenei,” wrote Ali Alfoneh for The Arab Gulf States in Washington website in 2023, “presumably wants to have his own preferred candidate succeed him, but he cannot publicly name a successor-designate without creating a rival and bringing about a dual power dynamic undermining his own authority.”

In March, several days after Ali Khamenei was killed, his son Mojtaba was named as his successor. Also a cleric, of a rank one “rung” below ayatollah, called hojjatoleslam, he has developed close ties with the Islamic Revolutionary Guard Corps (more on which shortly). And, according to an investigation by Bloomberg, he has an investment empire that extends through the Gulf and Europe, including luxury property in London and fancy hotels in Frankfurt and Mallorca, although “there’s little indication the family has used the foreign assets to fund lavish lifestyles”.

Mojtaba’s mother, his wife and a son also died in the military strike that killed his father. His appointment goes against a longstanding belief that Iran should not be run by dynasties, Bloomberg reports: “With his selection, all pretence that the theocracy is based on a consensus-driven system that puts the needs of the people first, has been abandoned — at a time of war — as it seeks to protect the interests of the hardliners in power.” Trump, for his part, was “disappointed” by the pick.

What’s the Islamic Revolutionary Guard Corps?

Known for short as the IRGC, it’s one of the most powerful – and feared – organisations in Iran, according to the Council on Foreign Relations. Separate from the regular military, it is charged with protecting the state’s regime: it was born of distrust in the regular armed forces among Iran’s clerical leaders after they came to power, framed as a “people’s army” that would protect the clerics from any coup, and acting as a “counterweight” to existing institutions such as the government and judiciary. The IRGC bypasses the elected president and reports directly to the supreme leader.

As well as being in charge of law enforcement, the guard’s broad-ranging interests extend from oil and gas projects to construction and telecommunications. It controls as much as 40 per cent of Iran’s economy, Bloomberg has reported. It also runs Iran’s ballistic missile program, which US forces “bunker bombed” in June 2025 after Israel claimed Iran was days from assembling nuclear bombs. Killed in those strikes was, among others, IRGC head Hossein Salami, who was replaced by Mohammad Pakpour, who was killed in the 2026 strikes; he was replaced by brigadier general Ahmad Vahidi. The guard’s elite foreign espionage arm, the Quds Force, lost its top commander, Qassem Soleimani, to a US drone attack in Iraq in 2020.

The guard has an estimated 190,000 personnel across ground forces, air, navy and cyber forces, and since 2007 has commanded the Basij paramilitary arm, which has about 600,000 members when mobilised, reports the Council on Foreign Relations. (Iran’s regular army has about 350,000 troops, including conscripts.)

Bahrain, Saudi Arabia, Sweden, the United States and Australia (as of November 2025) consider the guard a terrorist organisation. In Canberra, the move to list it as a state sponsor of terror followed the expulsion of the Iranian ambassador and the closure of Australia’s embassy in Tehran, in August 2025, after revelations that the Iranian government had directed at least two attacks against the Jewish community in Australia in 2024.

Why does Iran have a problem with the United States?

“For many Iranians and certainly those in the Islamic Republic, the friction can be traced to 1953,” says Ali Ansari, a professor at St Andrews University in Scotland and widely regarded as a world authority on Iran. He means the coup, of course, that Britain and the CIA helped orchestrate.

Then there’s 1979: the US granted asylum to the shah, prompting angry Islamic revolutionaries to storm the US embassy in Tehran and take 52 US hostages. They were held for 444 days and released on January 20, 1981, just after Ronald Reagan had been sworn in as president. Donald Trump recalled the embassy incident, among other grievances against Iran’s regime, in his video announcing the US-Israel attacks on Iran in 2026. It was also in 1979 that Khomeini coined his memorable catchphrase: “[America is] the great Satan, the wounded snake.”

Fast-forward 45 yearsand the great Satan is still enemy number one. Ahead of Iran’s legislative elections in 2024, Khamenei said this: “Elections are a manifestation of the republican system, and this is why the arrogant powers and the US, who are opposed to both republicanism and the Islamic nature of the Islamic Republic, are against the elections and the enthusiastic participation of the people at the ballot boxes.”

Who are these “arrogant powers”? Khamenei again, this time from 2023: “The arrogant powers refers to those villainous, aggressive, international forces that always want more and are never ever satisfied with what they have. They observe, make plans, and see that they need to create a conflict in one place in order to profit in some other place.”

Then there are the ongoing US trade embargoes imposed since 1979 and now in a stalemate. In 2018, the US, during Trump’s first presidency, walked away from a 2015 nuclear agreement known as the Joint Comprehensive Plan of Action, designed to limit Iran’s nuclear ambitions. In February 2024, the head of the International Atomic Energy Agency, Rafael Grossi, said Iran was enriching uranium almost at weapons-grade, which belied its claims it was for civilian power production.

“Iran and the United States have many reasons not to trust each other,” says Alam Saleh, lecturer in Iranian Studies at the Australian National University. “But it’s mainly about a power struggle. Iran is located in perhaps one of the most strategically important regions in the world, the Middle East. Therefore, Iran’s rise in power would not only undermine the United States and the Western interests in the region but also would be considered a threat by many of Iran’s neighbouring regimes. So nobody is happy in the region.”

What’s Iran’s shadow war with Israel? What are its ‘proxies’?

For years, Iran and Israel were engaged in a “shadow war”. Israel had long sought to thwart the regime’s ambitions to build nuclear weapons, its secret agents believed to be responsible for assassinating several Iranian nuclear scientists, including one by a remote-controlled machine gun.

But in April 2024, Israel seemed to change up a gear when its warplanes destroyed the Iranian consulate in Syria’s capital, Damascus, killing at least 11 people, including two senior commanders in the Revolutionary Guard – a provocation that Khamenei vowed would be avenged, foreshadowing rocket and drone attacks that stepped up the conflict. (Those attacks caused little damage, in part because Iran telegraphed them.)

The following year, over 12 days in June, Israel launched strikes against Iran’s nuclear sites, Iran retaliating with missile and drone attacks, the US then striking targets in Iran – which prompted Iran to launch missiles at a US military base in Qatar (again, the base had been evacuated) before a ceasefire came into effect.

Yet for many years, Iran largely limited its threats against Israel by supporting “proxies”: militant and terror groups in the region, notably Hamas in Gaza. Iran supports Hezbollah in southern Lebanon, although Hezbollah was significantly weakened by Israeli bombing and ground attacks on Lebanon in 2024. It supports the Houthis, a rebel group that emerged in the 1990s in northern Yemen and which, in response to the war in Gaza, has harassed military and commercial shipping passing through a pinch point on its way to the Suez Canal. And it supports various militias and political parties in Bahrain, to whom it provides weapons, financial support and military training through the guard and the Quds Force. Iran is also “deeply involved” in the affairs of next-door neighbour Iraq, especially since the fall of Saddam Hussein in 2003, according to the Council on Foreign Relations.

It is an unusual arrangement in that the goals of the proxies do not always directly align with those of Iran or its Shia branch of Islam. “Iran is not particularly pious when it comes to which groups they’ll back,” says Ben Scott, a senior adviser at the National Security College at ANU. “They prefer to back groups that are more aligned to them, who are Shia if possible, but they’ll back whoever works. The most prominent non-Shia proxy is definitely Hamas because Hamas is Sunni Arab. It hasn’t been a straightforward relationship, as it has been with Hezbollah [which is Shia].”

‘Plausible deniability is a big part of their approach. All that feeds into the idea of building up this network of partners and proxies through the region.’

Sunni Islam is the largest branch of Islam, followed by most of the world’s Muslims, including those in Saudi Arabia, making it the largest religious denomination in the world. Shia Islam is the second-largest branch of Islam and is the dominant form of the faith in Iran, Iraq and Azerbaijan. (The differences between Sunni and Shia Muslims emerged after a disagreement over the succession to the Prophet Muhammad.)

“Plausible deniability is a big part of their approach,” says Ben Scott. “All that feeds into the idea of building up this network of partners and proxies through the region, which you can use to carry out these battles elsewhere to attack US, Israeli and Gulf Arab states.”

Iran and the Saudis are on opposing sides in the civil war in Yemen, the Houthis pitted against the ousted government supported by Saudi Arabia. Again, says Scott, “there’s a debate about Iran’s command and control. It’s fair to say it’s much looser when it comes to the Houthis.”

Meanwhile, Iran’s domestic troubles have been brewing for a long time, not least as prices have risen much faster than wages. Even after protests in which women defied mandatory hijab rules in 2022, newer laws made wearing “inappropriate” clothing even more criminal, punishable by up to 10 years in jail.

“I don’t think reform has been on the cards for some time,” Ansari told us in 2024. “The regime has run out of ideas and can only think of doubling down on a fossilised ideology. I think it is on a steady spiral downwards.”

With Maher Mughrabi

This explainer was first published on February 25, 2024. It has since been updated, including with newswires, to reflect a series of developments.

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