Official diplomatic relations between the Republic of Azerbaijan and the Islamic Republic of Iran were established following the dissolution of the Soviet Union (1991). Iran and Azerbaijan share, to a large extent, the same history, religion, and culture. The territory of what is now called the Republic of Azerbaijan was only separated from Iran in the first half of the 19th century, through the Russo-Persian Wars. In the area to the North of the river Aras, the territory of the contemporary Republic of Azerbaijan was Iranian territory until it was occupied by Russia. Iran and Azerbaijan are both majority Shia Muslim nations. They have respectively the highest and second highest Shia population percentage in the world, as well as the history of Shi'ism which is rooted in both nations from exactly the same moment in history, whereas the majority of the population of both their neighboring nations are either predominantly Christians or Sunni Muslims. However, there are some tensions between the two countries as its political alignment may vary by degree. The Republic of Azerbaijan has become increasingly pro-Western aligned, and is an ally of Israel, Turkey and the United States (the latter two being NATO members) while the Islamic Republic of Iran is largely pro-Russian and pro-Chinese aligned due to its hostility towards the U.S. and has been targeted with sanctions. Iranian politicians, like Mohammad Hosseini, have called Azerbaijan an Israeli proxy.
In May 1918, the Musavat government adopted the name "Azerbaijan" for the newly established Azerbaijan Democratic Republic, for political reasons, even though the name of "Azerbaijan" had always been used to refer to the adjacent region of contemporary northwest Iran. As the Soviet Union dissolved in 1991, a relatively downwards spiral started in the modern relations between Iran and Azerbaijan. In May 2015, the Ambassador of Iran to Azerbaijan announced that it didn't recognize the Nagorno-Karabakh Republic.
Iran recognized Azerbaijan's independence in 1991, and diplomatic relations between the two countries were established in 1992. Iran has an embassy in Baku and a consulate-general in Nakhchivan City. Azerbaijan has an embassy in Tehran and a consulate-general in Tabriz. Both countries are full members of the Economic Cooperation Organization (ECO) and the Organisation of Islamic Cooperation (OIC).
Context
For almost all of its history, the territory of the present-day Republic of Azerbaijan was a part of the various Iranian/Persian empires or Persianate empires, specifically during the reign of dynasties such as Median, Achaemenid, Parthians, Sassanid, the Shirvanshah, various dynasties of the Iranian Intermezzo, the Kara Koyunlu, the Ak Koyunlu, the Safavids, the Afsharids, the Zands, and the Qajars. The South Caucasus, in general, has been influenced by Iranian culture for thousands of years. In the course of the 19th century, following the occupation of the Caucasus by Russian troops during the Russo-Persian War (1804-1813) and Russo-Persian War (1826-1828), Qajar Iran was forced to cede what is now Azerbaijan, alongside Georgia, Dagestan, and Armenia to Imperial Russia under the terms of the treaties of Gulistan and Turkmenchay.
According to Pierre Thorez: "Although throughout history the Caucasus has usually been incorporated in political entities belonging to the Iranian world, at the beginning of the 19th century Russia took it, along with the Transcaucasus, from the Qajars (1133–1342/1779–1924), severing those historical ties. Since the establishment of Soviet power on Caucasian territory, relations with Persia have been reduced to an insignificant level.". According to Tadeusz Swietochowski, the territories of Iran and the republic of Azerbaijan usually shared the same history from the time of ancient Media (ninth to seventh centuries b.c.) and the Persian Empire (sixth to fourth centuries b.c.).