By the end of Iran-Iraq war and the need for reconstruction of the regions damaged during the war, the changes in the world social and economic structure and the fall of Soviet Union marked the changes in international and domestic relations. These developments paved the way for the revision of Iranian foreign policy and engaging in an active dialogue with the rest of the world.

The collapse of Soviet Union and disappearance of the world bi-polar order gave a more freedom and discretion to the EU in its international relations from the United States policies. This independent position by EU reflects the converging interests among the member states of EU for expanding ties with Iran, in particular in economic sphere. Because of the absence of the United States in economic activities in Iran, EU's access to the Iranian market is more attractive for EU. EU was keen not to lose this opportunity.

In this paper we shall review the international, regional and local developments which led to the expansion of the interactions between Iran and EU in the above period.