In the early 1950s, there was a political crisis centered in Iran that commanded the focused attention of British and American intelligence agencies. In 1951 Dr. Mossadegh came to office, committed to re-establishing democracy and constitutional monarchy, and to nationalizing the Iranian petroleum industry, which was controlled by the British. From the start he erroneously believed that the Americans, who had no interest in the Anglo-Iranian Oil company, would support his nationalization plan. He was buoyed by the American Ambassador, Henry Grady. However, during these events, the Americans supported the British, and, fearing that the Communists with the help of the Soviets were poised to overthrow the government, they decided to remove Mossadegh. Shortly before the 1952 presidential election in the US, the British government invited Kermit Roosevelt, Jr., of the CIA to London and proposed they cooperate under the code name 'Operation Ajax' to bring down Mossadegh from office.[3]

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a 1953 period of political disagreements with Mohammad Mossadegh, eventually leading to Mossadegh's ousting, caused an increasingly autocratic rule. In 2000, U.S. Secretary of State Madeleine K. Albright stated:

    "In 1953 the United States played a significant role in orchestrating the overthrow of Iran's popular Prime Minister, Mohammed Massadegh. The Eisenhower Administration believed its actions were justified for strategic reasons; but the coup was clearly a setback for Iran's political development. And it is easy to see now why many Iranians continue to resent this intervention by America in their internal affairs."[1]

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In 1951, under the leadership of the nationalist movement of Dr. Mohammed Mossadegh, the Iranian parliament unanimously voted to nationalize the oil industry. This shut out the immensely profitable Anglo-Iranian Oil Company (AIOC), which was a pillar of Britain's economy and political clout in the region. A month after that vote, Mossadegh was named Prime Minister of Iran.

Under the direction of Kermit Roosevelt, Jr., a senior Central Intelligence Agency (CIA) officer and grandson of former U.S. President Theodore Roosevelt, the American CIA and British Secret Intelligence Service (SIS) funded and led a covert operation to depose Mossadegh with the help of military forces loyal to the Shah. This plan was known as Operation Ajax.[4] The plot hinged on orders signed by the Shah to dismiss Mossadegh as prime minister and replace him with General Fazlollah Zahedi, a choice agreed on by the British and Americans.

Despite the high-level coordination and planning, the coup initially failed, causing the Shah to flee to Baghdad, then Rome. After a brief exile in Italy, the Shah returned to Iran, this time through a successful second attempt at the coup. The deposed Mossadegh was arrested, given a show trial, and sentenced to solitary confinement for three years in a military prison, followed by house arrest for life. Zahedi was installed to succeed Prime Minister Mossadegh.[5]

The American Embassy in Tehran reported that Mossadegh had near total support from the nation and was unlikely to fall.

Various controversial policies were enacted, including the banning of the Tudeh Party and a general suppression of political dissent by Iran's intelligence agency, SAVAK.