Established In 1967 as a nonprofit educational organization to encourage and facilitate Iranian studies, the American Institute of Iranian Studies was founded by a committee composed of Robert H. Dyson, Jr., Richard N. Frye, and Jacob C. Hurewitz. The institute was supported by some twenty universities and museums, each of which nominated a trustee to the governing board, which elected officers to administer the institute.

From 1969 until 1979 the institute operated a center in Tehran, which served as a liaison between North American scholars and the Iranian government. The Tehran center also maintained a small library, issued a quarterly newsletter, hosted informal seminars on current research, and maintained a hostel to provide temporary housing for scholars. During the years the Tehran center was open there was a virtual explosion of research in Iran. Numerous archaeological excavations and regional surveys were conducted, and graduate students and established scholars in almost all humanistic and social science disciplines were well represented in the country. The center was a focal point for interdisciplinary discourse that created a remarkable sense of camaraderie.

Since 1979 the institute has continued to foster research on Iranian topics by offering dissertation grants, essay and translation prizes, and publication subvention. It has supported a bibliographic inventory of resources for Iranian studies in North American libraries and commissioned a survey of the state of Iranian studies in North American universities. In January 1989, the institute convened a conference on Iranian studies at the Arthur M. Sackler Gallery at the Smithsonian Institution in Washington, D.C. Papers were delivered on the state of studies in the following disciplines: literature, history, linguistics, economics, sociology, political science, geography, anthropology, archaeology, and art history. The proceedings of the conference will be published in a special issue of the journal Iranian Studies. The archives of the institute are held in the University Museum Archives at the University Museum, University of Pennsylvania.

William M. Sumner