During the same period as the Mongols and the Timurids, north-western Iran went through a different historical development. It was here that Turkoman groups fought with each other for power. The Turkoman Dynasty of the Kara-Koyunlu, or "Black Sheep" (1275-1468) was set up at Tabriz, and it was later replaced by the Ak-Koyunlu, or "White Sheep" (1434-1514). However, there was a third dynasty, called the Safavids (1502-1737), that emerged in Azerbaijan, and had as its leader Shah Ismail (1487-1524). He successfully conquered a vast territory which extended from Herat (Afghanistan) to Baghdad (Iraq).  

The Safavid dynasty takes its name from Sheikh Safi-od-Din of Ardabil, who was the ancestor of the Safavid kings and spiritual leader of the Safavid Sufi order, founded in 1301.
The Safavid order was initially indistinguishable from the many other Sufi orders in existence in the Muslim world at that time. But Junayd, who became the head of the order in 1447, transformed it into a revolutionary Shi'ite movement that aimed at seizing power in Iran. Though the Safavid family itself was of Iranian origin, the bulk of its supporters were Shi'ite Turkoman tribesmen from Anatolia, Syria, Upper Mesopotamia, and Armenian highlands.

The Safavids were successful in bringing the whole of the Iranian plateau under unified control, and they made Iran a "national state" in the modern sense of the word. The height of Safavid glory was at the time of the reign of Shah Abbas I (1571-1629), who encouraged contact and trade with Europe and transformed his new capital, Isfahan, into one of the most magnificent cities of Persia. The presence at the Safavid court of foreign envoys and the growing number of merchants and travellers in Iran was later to have a great influence on the arts and literature in Europe.