Dunsterforce was an Allied military force, established in December 1917 and named after its commander, Major-General Lionel Dunsterville. The force comprised fewer than 350 Australian, New Zealand, British and Canadian officers and NCOs, who were drawn from the Western and Mesopotamian fronts. The force was intended to organise local units in northern Iran (Persia) and South Caucasus, to replace the Tsarist army that had fought the Ottoman armies in Armenia. The Russians had also occupied northern Iran in co-operation with the British occupation of southern Iran, to create a cordon to prevent German and Ottoman agents from reaching Central Asia, Afghanistan and India.

In July 1918, Captain Stanley Savige, five officers and fifteen NCOs of Dunsterforce, set out towards Urmia and were caught up in an exodus of Armenians and Assyrians, after the town had been captured by the Ottoman Army. About 80,000 people had fled and the Dunsterforce party helped hold off the Ottoman pursuit and attempts by local Kurds to get revenge on the Assyrians for their earlier plundering. By the time the rearguard reached Bijar on 17 August, the Dunsterforce party was so worn out that only four men recovered before the war ended. A combined infantry and cavalry brigade was raised from the Assyrian survivors to re-capture Urmia and the rest of the civilians were sent to refugee camps at Baqubah near Baghdad.

Dunsterville and the rest of the force, with reinforcements from the 39th Infantry Brigade, drove in 500 Ford vans and armoured cars about 220 mi (350 km) from Hamadan across Qajar Iran to Baku. Dunsterforce fought in the Battle of Baku from 26 August to 14 September 1918 and abandoned the city on the night of 14/15 September, to be disbanded two days later. North Persia Force (Norper Force, Major-General William Thomson) took over command of the troops in northern Iran. Troops diverted from Dunsterforce in Sweet's Column opposed an Ottoman diversion from Tabriz, on the Persian road, during September; the situation was transformed by news of the great British victory in the Battle of Megiddo in Palestine (19–25 September). The Islamic Army of the Caucasus was the only source of Ottoman reinforcements and had to give up divisions, ending offensive operations in the theatre.

Britain and Russia had played The Great Game for influence in Central Asia from the early nineteenth century but in the 1880s, Russian absorption of the local Khanates and Emirates restricted British influence. The Anglo-Russian Convention of 1907 ended the rivalry by defining spheres of influence in Afghanistan, Iran and Tibet. Early in the First World War, British and Indian forces set up the East Persia Cordon with Seistan Force assembled from the Indian Army. The force was created to counter German, Austrian and Ottoman subversion in Afghanistan and the North West Frontier of British India. Two squadrons of the 28th Cavalry Regiment and the locally raised South Persia Rifles patrolled the border of Baluchistan and the Persian Empire. The Russian Revolution of 1917 led to the collapse of the convention; the dissolution of the Tsarist armies from March 1917 left open the Caspian Sea and the route from Baku to Krasnovodsk and Central Asia to the Central Powers. In the spring of 1918, German and Ottoman forces advanced into Transcaucasia and Central Asia.

Russian policy towards Iran in 1914 was based on assurances that Iranian territorial integrity would be respected. Tsarist expansion in northern Iran and opposition to the emergence of a stable modern state, led to suspicion that its policy was really to keep Iran as a dependency or to absorb more of its northern provinces. Britain traditionally sought to maintain commercial interests in the country and the use of naval power to protect India. The geographical position of Iran, between Europe and India and the ancient west–east trade routes through Iranian provinces, had led the British in the nineteenth century to follow a policy of using Iran as a buffer state. The British in practice preferred inaction, although it enabled Russian expansionism until the Anglo-Russian Convention (Anglo-Russian Entente) of 1907.

The Russian sphere ran from Meshed in the east to Tabriz in the west and as far south as Teheran and the British sphere ran west of the North-West Frontier of India and the Afghan border, west to the vicinity of Bandar Abbas on the Persian Gulf. Only the Ottoman Empire remained as a possible field for German diplomatic and economic influence. Traditional Ottoman hostility to Iran on religious grounds meant that the Pan-Islamism of Sultan Abdul Hamid II of the Ottoman Empire failed to gain much of a following in Iran, until the Young Persians took it up as a political tool. The Young Turks in the Ottoman Empire evolved into Pan-Turanists, seeking to renew the Ottoman Empire by expanding into Trans-Caucasia, Turkestan and at least the north-west of Iran. By 1914 little attention had been paid to the Pan-Turanists, mainly due to the power of the Russian Empire; Ottoman encroachments on Iran were seen as defensive moves against Russia.

In 1914, British forces from India occupied Iranian territory east of the Shatt al-Arab waterway, to guard oil concessions in Iran and in 1915 advanced up the Tigris river to Ctesiphon near Baghdad, before being defeated by the Ottoman army and forced to retreat to Kut. During the Siege of Kut (7 December 1915 – 29 April 1916), the Ottomans defeated three relief attempts and refused an offer of £2,000,000 to ransom the garrison, which surrendered at the end of April. Hopes of a Russian relief force from the Caspian Sea through Kermanshah and Khanaqin (Khanikin) to Baghdad failed to materialise. From May–November 1916, the British consolidated a hold on Ottoman territory to the west of Iran around Basra and the confluence of the Euphrates and Tigris at the head of the Persian Gulf. In 1917 the British campaign in Mesopotamia continued, with advances to Baghdad and towards the oilfields of Mosul as the campaign in the Levant led to the occupation of Palestine. A Russian invasion of 1915 from Caucasus established bases at Resht, Kazvin and Teheran and led to inconclusive operations between the Russians and Ottomans further west, closer to the Iranian–Ottoman border.

In January 1915, the British Cabinet had canvassed possible diversionary attacks against the Ottoman Empire after appeals for support from the Russian Empire. The British planned operations against the Ottoman Empire in the Aegean Sea, eastern Mediterranean and a land invasion of the Levant from Egypt, combined with a Russian invasion from Caucasus towards Anatolia and Mesopotamia. In 1917, the Eastern Committee of the War Cabinet considered that British India had been drained of troops and decided to avoid committing more troops to Iran from Europe, by sending a mission of picked men to train local recruits at Tiflis (now Tbilisi), the capital of Georgia. The War Office undertook to send 150 selected officers and 300 NCOs, to organise local forces and replace the Russian Caucasus Army. Another force was to be raised in north-western Iran by Lieutenant-General W. R. Marshall, commander of the III (Indian) Corps of the Mesopotamian Expeditionary Force (MEF, Lieutenant-General Frederick Stanley Maude); the French took responsibility for the area north of Caucasus.