This papers examines the counsel of the formation of the Expediency Discernment Council in the Islamic Republic of Iran. It aims to analyse the reasons why late Imam Khomeini decided to form the council. Having demonstrated the reasons for the formation of the council, its functions, duties and responsibilities, the article pays a particular attention to the late Imam Khomeini. It shows that the idea for such a top ranking decision was the logical approach which Imam Khomeini had toward politics and state. In other words, the council demonstrates Imam Khomeini's rationalism in politics. Imam Khomeini was aware of the kind of economic, political and social problems which a modern Islamic State such an Iran may confront in managing the state according to Islamic laws. In order to circumvent these problems, he envisaged the Expediency Discernment Council.