Following the Iranian Revolution, which overthrew the Shah of Iran in February 1979, Iran was in a "revolutionary crisis mode" until 1982 or 1983 when forces loyal to the revolution's leader, Ayatollah Ruhollah Khomeini, consolidated power. During this period, Iran's economy and the apparatus of government collapsed; its military and security forces were in disarray.

Rebellions by Marxist guerrillas and federalist parties against Islamist forces in Khuzistan, Kurdistan, and Gonbad-e Qabus started in April 1979, some of them taking more than a year to suppress. Concern about breakdown of order was sufficiently high to prompt discussion by the US National Security Advisor Zbigniew Brzezinski over the danger of a Soviet invasion/incursion (the USSR sharing a border with Iran) and whether the US should be prepared to counter it.

By 1988, Khomeini and his supporters had crushed the rival factions and consolidated power. Elements that played a part in both the crisis and its end were the Iran hostage crisis, the invasion of Iran by Saddam Hussein's Iraq, and the presidency of Abolhassan Banisadr.

It is generally agreed that while Khomeini had shrewdly assembled and kept together a broad coalition to overthrow the shah, it contained many mutually incompatible elements, "liberals of Mussadeq's old National Front, remnants of the communist Tudeh party, and the 'new left' movements, inspired by similar developments among Palestinian and Latin American youth ...", all of whom who had differences among each other and none of whom were interested in Khomeini's plans for a theocracy.

Khomeini's particularly contentious plan was for rule of Iran by Islamic jurists (a concept known as Velayat-e faqih), with himself as leader, a form of government that he had not mentioned in any public statements before taking power, and which it is thought would have been a political deal breaker for liberals, Muslim moderates, and supporters of Ali Shariati. With the fall of the Shah, the glue that unified the various ideological (religious, liberal, secularist, Marxist, and Communist) and class (bazaari merchant, secular middle class, poor) factions of the revolution—opposed to the Shah—was gone. Different interpretations of the broad goals of the revolution (an end to tyranny, more Islamic and less American and Western influence, more social justice and less inequality) and different interests, vied for influence.

Some observers believe "what began as an authentic and anti-dictatorial popular revolution based on a broad coalition of all anti-Shah forces was soon transformed into a power-grab" by Islamic fundamentalists, that significant support came from Khomeini's non-theocratic allies who had thought he intended to be more a spiritual guide than a ruler—Khomeini being in his mid-70s, having never held public office, having been out of Iran for more than a decade, and having told questioners things like "the religious dignitaries do not want to rule."

Another view was that although Khomeini may have needed elements of his broad coalition to overthrow the Shah, in the aftermath he had "overwhelming ideological, political and organizational hegemony," and non-theocratic groups never seriously challenged Khomeini's movement in popular support.

Still another view, was held by Khomeini supporters (such as Hamid Ansari), who insist that Iranians opposed to the new ruling state were "fifth columnists" led by foreign countries attempting to overthrow the Iranian government.