Since the early 1990s, the Islamic Republic of Iran has been sponsoring Hamas with military aid, training and financial aid. Iran has remained a key patron of Hamas, providing them with funds, weapons, and training.

According to a 2020 US Department of State report, Iran provides about $100 million annually to Palestinian militant groups, including Hamas. As of 2023, according to an Israeli security source, Iran had significantly increased its funding for Hamas to $350 million a year.

Relations between Iran and Hamas strengthened after the PLO pursued peace efforts with Israel. In 1990, Iran hosted a conference in Tehran supporting Palestine, which was attended by Hamas but not by Yasser Arafat. During the early 1990s, a delegation from Hamas, headed by Mousa Abu Marzouk, engaged in discussions in Tehran with senior officials, among them Ayatollah Khamenei. Iran then committed to both military and financial backing, with reportedly $30 million per year, in addition to providing military training to thousands of Hamas members at Revolutionary Guard bases in Iran and Lebanon. Furthermore, Hamas inaugurated an office in Tehran, stating that both Iran and Hamas shared an "identical view in the strategic outlook toward the Palestinian cause in its Islamic dimension."

According to the U.S. Department of State, the Iranian Intelligence Minister Ali Fallahian authorized the Kfar Darom bus attack, a suicide bombing operation that targeted a bus full of Israeli soldiers and Israeli settlers in the Gaza Strip. Seven Israeli soldiers and one settler were killed. The operation was a joint Hamas and Palestinian Islamic Jihad operation, the perpetrator was an Islamic Jihad militant and the bomb was designed by Hamas military wing leader Yahya Ayyash.

After Israel assassinated Ayyash on 5 January 1996, Mohammed Deif organized a mass-casualty bombing campaign inside Israel as retaliation, including the Dizengoff Center suicide bombing in Tel Aviv and the two Jaffa Road bus bombings in Jerusalem. These operations were, in their scale, scope and sophistication, different and larger than any attacks of the past, and it has been alleged that both Syria and Iran had helped in their planning and financing. According to a report, Syrian Minister of Defense Mustafa Tlass instructed Ghazi Kanaan, the commander of Syrian forces in Lebanon, to establish links between Hezbollah and Hamas fighters, who were then trained both in Lebanon and in Iran and participated in the retaliatory operations for the murder of Ayyash. According to Mike Kelly, Hamas operative Hassan Salameh, who planned three of the attacks, was trained in Iran. In 2000, families of American victims of the attacks filed a lawsuit against Tlass, Kanaan and Iranian Minister of Intelligence Ali Fallahian.

Iran's support for Hamas continued through the violence of the Second Intifada. Following Arafat's passing in 2004 and Israel's exit from Gaza in 2005, Tehran's support progressively increased.

According to Lebanese militant Anis al-Naqqash, during the Second Intifada, Major General Qasem Soleimani, commander of the Islamic Revolutionary Guard Corps' elite Quds Force, and Imad Mughniyeh, chief of military operations for Hezbollah, oversaw the smuggling of weapons to the Palestinian Hamas and Islamic Jihad factions.

Iran and Hamas became dramatically closer following Hamas' unexpected win in the 2006 Palestinian elections and its violent seizure of the Gaza Strip in 2007. In 2006, Iran intervened to support the nearly insolvent Palestinian Authority in Gaza, which was now under Hamas control, as foreign aid collapsed. During a December 2006 visit to Tehran by Hamas Prime Minister Ismail Haniyeh, Iran committed to providing $250 million in assistance.