Two basic related arguments have informed and shaped much of the scholarly discourse and public consciousness of recent Iranian history. The first is that Shiism is an integral part of the Iranian religious and cultural landscape. The second is that the ulema have played a crucial role in the Iranian political structure despite their internal theological differences and political divisions. I challenge these assumptions and propose a different line of inquiry in studying the role of the religious institution and the ulema in Iranian history and politics. My overall argument is that certain historical conditions and adopted strategies of state making in Iran gave rise to the power and the institution of the ulema and consolidated Shiism as a part of the Iranian national identity. Ironically, this process was intensified during the Pahlavi secular regime (1926–79), and the Islamization of the 1979 revolution and the formation of Iran's first theocratic state, the height of the power of religion and the ulema, could be also the starting point of the constitutional separation of the state and the religious institution.