The American Embassy in Iran had grown to one of the largest in the world, with a staff off over 2,000. Additionally, under the Shah, Iran had became the largest importer of American made weapons. Throughout 1978, demonstrations against the Shah continued to grow and led to bloodshed and violence. Eventually, most cities were place under martial law by the Shah. The Ayatollah Khomeini, a religious leader who had been exiled for 15 years by the Shah after 8 months of imprisonment continued to fan the flames from outside the country. On January 16th, 1979, the Shah fled Iran. The United States had pledged support to the Shah, but it was obvious at this time he had lost control of the country. He left the country, fleeing to Egypt, effectively ending over 2000 years of continuous rule of monarchy, which began under Cyrus the Great. Into this power vacuum stepped the Ayatollah Khomeini, who fervently anti-american.
The weeks following the Revolution saw violence continuing in the streets across Iran. The Ayatollah returned to his home and pondered the future of his country. Rumors swirled as the type of government he would install, from democracy to a theocratic monarchy.
In February, 1979, the U.S. Embassy narrowly escaped an attempted siege from a left wing guerrilla group. The attempted takeover resulted in this major American Embassy to reduce its staff from 2,000 to less than 20 Americans.
A few months later, the United States attempted to re-establish the embassy and send a group of over 70 diplomats for the task. By the summer of 1979, the embassy had mostly been re-established with diplomatic contacts back in place. Although still on high alert, the embassy had basically returned to normal. Dancing, dinners, and entertainment has resumed to the sprawling 27 acre facility.
The embassy personnel was dealing with a provisional government brought on by the revolution. Unknown at the time, but many hard right wing students and radical clerics saw this "normalization" as a threat to the revolution. Most of these people assumed the United States was meddling in Iranian affairs again.
Compounding this problem was the Shah. He had been moving from country to country in exile for the last eight months and had became ill. He requested entry into the United States in order to seek medical treatment. The Foreign Affairs Officer who was temporarily in charge of the Embassy until an Ambassador warned the State Department of the possibility of another attack on the embassy. Surrounded by his foreign policy team, who argued for the admittance of the Shah into the country, President Carter ominously asked "What the hell are you going to do if they take our people hostage?" Nevertheless, President Carter granted access into the country for the deposed Shah. This decision by President Carter would prove fatal to his Presidency.