In 1951, an eccentric pro-democratic nationalist, Dr. Mohammed Mossadegh rose to prominence in Iran and was elected its first Prime Minister. As Prime Minister, Mossadegh alarmed the West by his nationalization of Anglo-Iranian Oil Company (later renamed BP), which controlled all of the country's oil reserves. Britain immediately put an embargo on Iran. Members of the British Intelligence Service approached the United States under President Eisenhower in 1953 to join them in Operation Ajax, a coup against Mossadegh. President Eisenhower agreed, and authorized the CIA to assist the BIS in overthrowing Mossadegh. The Shah at first attempted to formally dismiss Mossadegh, but this backfired and Mossadegh convinced the Shah to flee to Baghdad.
Regardless of this setback, the covert operation soon went into full swing, conducted from US Embassy in Tehran under the leadership of Kermit Roosevelt, Jr.. Agents were hired to facilitate violence; and, as a result, protests broke out across the nation. Anti- and pro-monarchy protestors violently clashed in the streets, leaving almost 300 dead. The operation was successful in triggering a coup, and within days, pro-Shah tanks stormed the capital and bombarded the Prime Minister's residence. Mossadegh surrendered, and was arrested on 19 August 1953. He was tried for treason, and sentenced to three years in prison.
Mohammad Reza Pahlavi was then reinstated as Shah. His rule became increasingly autocratic in the following years. With strong support from the US and UK, the Shah further modernized Iranian industry, but simultaneously crushed all forms of political opposition with his intelligence agency, SAVAK. Ayatollah Ruhollah Khomeini became an active critic of the Shah's modernization efforts and publicly denounced the government. Khomeini, who was popular in religious circles, was arrested and imprisoned for 18 months. After his release in 1964, Khomeini publicly criticized the United States government. Instead of executing Khomeini, the Shah was persuaded to send him into exile by General Hassan Pakravan. Khomeini was sent first to Turkey and then to Iraq. While in exile, he continued to denounce the Shah and gained more popularity among Iranians.
By the late 1970s, it became apparent that the Shah was losing his hold over the country. In 1978, when protests against his rule grew louder, the shah instituted martial law. Despite this period, on 8 September, mass but peaceful protests around the country were held. This came to an abrupt end when the Shah sent in the military to suppress the demonstrations. As a result, several hundred protesters died in what many Iranians today call Black Friday, an event that quashed most support for the Shah in the country.
SAVAK was founded in 1957 with the assistance of the CIA and the Israeli Mossad. Its first director was General Teymur Bakhtiar, who was replaced by General Hassan Pakravan who was executed by the Revolutionary Guard after the Islamic Revolution. Pakravan was replaced in 1965 by General Nematollah Nassiri, a close associate of the Shah, and the service was reorganized and became increasingly active in the face of rising Islamic and Communist militancy and political unrest.
SAVAK had virtually unlimited powers of arrest and detention. It operated its own detention centres, like the notorious Evin Prison. It is universally accepted that SAVAK routinely subjected detainees to physical torture. In addition to domestic security the service's tasks extended to the surveillance of Iranians (especially students on government stipends) abroad, notably in the United States, France, and the United Kingdom.
SAVAK agents often carried out operations against each other. Teymur Bakhtiar was assassinated by SAVAK agents in 1970, and Mansur Rafizadeh, SAVAK's United States director during the 1970s, reported that General Nassiri's phone was tapped. Hussein Fardust, a former classmate of the Shah, was a deputy director of SAVAK until he was appointed head of the Imperial Inspectorate, also known as the Special Intelligence Bureau, to watch over high-level government officials, including SAVAK directors. Fardust later became director of SAVAMA, the post-revolution carbon copy of the original SAVAK organization. Also, SAVAK planned and executed Black Friday (1978), although the role of PLO agents in Black Friday has not been disproven. The CIA closely watched over SAVAK and provided them with intelligence on possible targets for assassination, many of whom were Communists. Many Communists were imprisoned or mysteriously disappeared as a result of this relationship. It is believed that the last director of SAVAK was on the payroll of the CIA.
(all text from Wikipedia)