The Hellenistic (Greek) domination of Persia that followed Alexander's invasion lasted only for about a century after his death in 323 BC. During this time some new Hellenistic cities were established and some Greek customs were introduced. However, native Iranian traditions were not lost and after this brief interlude the Persian Empire continued for nearly 1000 years.

The Iranian Parthian dynasty extended its influence on Iran from about 238 BC onwards, first conquering western Iran and Mesopotamia. By the 1st century BC the Parthians had re-established Persian rule in the entire region and the early coins they minted bore a strong resemblance to those of their Achaemenid ancestors. They controlled the central section of the silk route and were formidable enemies of Rome.

The Parthian empire collapsed at the beginning of the third century AD and was replaced in AD 224 by another Iranian dynasty, that of the Sasanians. They established Zoroastrianism - which had existed in Persia for centuries - as the formal state religion. Arts and crafts flourished, and the period was particularly renowned for its rock reliefs and fine decorated silver bowls. The founder of the dynasty was Ardashir I (AD 224-240), who came from Parsa in the Achaemenid heartland. He and his successors continued fighting with Rome and later Byzantium. The long reign of Shapur I (AD 240-272) is marked by the defeat of three Roman emperors.

Despite the short period of Greek control, there is much evidence for continuity between the Parthian and Sasanian dynasties and their Achaemenid predecessors. This can be seen in, for example, the form of the royal throne, the Iranian trouser-suit and the use of titles such as 'king of kings'. The Sasanian dynasty eventually lost power during the seventh century when Persia was absorbed into the Islamic world.