Iran attempted to set up a national economic plan after the second world war. After 1949, Iran has experienced five different development plans. The Fifth Five Year Plan is the one which is in operation at the present time. Before industrialization, the nation’s economy was dominated by oil and agriculture. There was a dual purpose for the intensive industrialization which started in the early 196’s - reducing the economy's dependence on exports of primary products, and increasing the rate of economic growth. The purpose of this thesis is to study the planning process and the process of import substitution in Iran. An attempt has been made to evaluate the different plans to determine the major problems involved in each particular plan and to evaluate the degree and extent to which each plan has succeeded in achieving the major targets of the plan, particularly in the industrial sector. An attempt also has been made to collect the set of available data on production, imports and exports of industrial goods at a somewhat disaggregated level to make some sensible analysis of the degree of import substitution and the patterns of industrial growth.