Iranian sources mention attacks by the Jews of Isfahan on the city’s Magi. Later persecutions were also politically motivated. Khosrau’s (r. AD 531-579) general Mahbad killed the Jewish followers of the pretender to the throne, Bahram Chobin. Another messianic revolt in Babylonia was ruthlessly put down in 640 AD. At the beginning of the Seventh Century, the Jews watched the Sasanian offensive against Byzantium with great expectancy, and joyfully welcomed the conquest of Jerusalem. At the same time, Christians were massacred in great numbers. Little is known about the number of the Jewish inhabitants in the Sasanian Empire, but it must have been quite considerable, especially in Babylonia. By far the majority of Jews made their living by farming, although handicraft and trade also played a part. They lived predominantly in villages, but also with many ethnic, linguistic and religious groups in larger towns and cities. There is no indication that they were forced to live in closed Jewish quarters (ghettos), as was the case in Islamic times. They are mentioned as physicians, scholars and philosophers. They taught at famous Iranian universities amongst other Christian, Indian, Roman, Greek and Persian scholars. Jewish Physicians along with Christians ran the famous Medical school Jundishapur for decades. Several members of the famous Christian families of Bukhtyishu and Masuya were involved in this school and had many Jewish assistants. Hunain B. Ishaq is the most famous Jewish physician of the early Islamic period. His family served at Jundishapur and he is credited with the best translations of Hippocratic and Galenic corpus into Arabic at the time of caliph al-Mutazid.

The conquest of Islam in the Seventh Century put an end to freedom of religion throughout the area. All polytheistic and pagan religions were banned altogether with all the other Near and Far Eastern religions. Islam does not recognize these as true religions. All major and minor deities were declared false gods and were eliminated. The house of Ka’ba contained around 100 of such deities alone; all were banished. The followers of all these religions became kofar (infidels) and were given the choice to either convert or die. Allah, a term used by local Christian tribes meaning god, became the only sovereign god, the almighty. Islam was the last and the most superior of all religions and Muslim males were made superior to all others including Muslim females. Christianity and Judaism were accepted as the only other true religions and their holy scripts were accepted as such. However, despite the large number of Christian and Jewish tribes in Arabia, their freedom was substantially restricted and their legal status lowered. They were given the right to practice their religion if they paid a discriminatory religious poll tax called jizya. In the Quran, these people are called dhimmis (ahle zimmeh); later Zoroastrians of Iran were included as well. Quranic verses are contradictory with respect to the Jews and Christians. In some verses, the Quran accepts them as legitimate, but others are discriminatory towards these groups.

The Quran prohibits Muslims from becoming friends with Christians and Jews (Quran; 5.51) and calls the latter liars, dishonest and violent (Quran; 5.18, 5.4, 5.44, 5.51, 5.64, 5.69, 5.82, 2.62, 2.113, 2.120, 2.135, 2.140, 22.17, 4.46, 4.160, 62.6, 16.118). Later edicts forbid Christians from any participation in building Mosques. Mixed marriages were banned for Muslim women. While Muslims could not become slaves, all others were subjected to slavery as purchased slaves or war booty. Later on, Christians and Jew were banned from riding horses while carrying arms and could not increase their numbers through conversion of others (The Covenant of Umar). They were segregated and their houses could have not exceeded those of the Muslims in height (the Jewish quarter in Kirman is an example).

Courts of Shari’a became the only legal avenue and the Quran gave Muslim males superior legal status. For instance, if a Jew or a Christian killed a Muslim, there was both ghesas (Physical punishment) and deyeh (monetary compensation). If a Muslim killed a Jew or a Christian, there was no ghesas and they only pay deyeh, which is half of what the Jew or the Christian has to pay. There was no punishment for killing kofar (non-believers) or mortad (Muslims who had converted into other faiths). In short, all except the Muslim males became second-class citizens The ‘Covenant of Umar’, probably initiated when Syria was conquered, made religious discrimination an institution. Umar believed Arabia should be purely Muslim and Arab. The large Christian and Jewish communities of Arabia mainly in Najran, Khaybar, Hijaz and Medina were expelled to the conquered territories and their properties were confiscated. His bias, brutality and discriminatory actions contributed to his assassination by a Persian slave.

The situation was worsening by the time of Caliph Harun al-Rashid in Eighth Century AD. The overwhelming population of the area at the time was Christian, Zoroastrian and Jewish. Their houses of worship were destroyed, they could not build any new ones, and jizya was increased substantially. Payment of the jizya was furthermore to be accompanied by signs of humility and recognition of personal inferiority. On payment of the tax, a seal, generally of lead, was affixed to the payee’s person as a receipt and as a sign of the status of dhimma. By the time of Caliph al-Motevakel in ninth Century, non-Muslims were all excluded from employment in government sectors, banned from Muslim schools, had to live in closed quarters and were forced to wear coloured ribbons to indicate they were non-Muslims. Jews had to wear yellow ribbons (vasleh Johudaneh)—a practice that was revived at times including the end of the 19th century in Iran.

Iran being part of the Greater Muslim Empire was subjected to the same rules. Since non-Muslims were forced out of the government institutions, they went into trade and banking. A wealthy class of Jewish merchants emerged with cash but little political influence. Later on, the money was used by some wealthy Jews throughout the empire to finance the Caliphs’ courts and wars, especially against the Crusaders. The exilarch still remained the vehicle through which Jewish affairs were regulated. The Muslim authorities appointed this figure. Muslim treatment of the religious minorities varied in accordance with the policies of the caliphs and attitudes of different governors. While the Umayyad governor of Iran; Hajjaj was ruthless and extremely biased, others were more lenient and did not follow all the discriminatory rules. There were many Christian, Zoroastrian and Jewish philosophers, physicians, scientists, engineers, musicians and court administrators in the first century of the Muslim Empire working for the caliphs. Later on, they all gradually converted or were forced out of government services. The coming of Abbasid improved the position of dhimmi for a while, especially during the reign of al-Mansur. He was a devoted follower of the sciences and supported the great translation movement of the 8th Century AD. Initiated by the Syriac, Greek, and Persians to preserve the ancient knowledge, the movement started in Syria and flourished in Baghdad. Scientists and intellectuals from all over got together and thousands of books were translated into Arabic from Greek, Hebrew, Persian and other languages. Iranian Jews were writing dari (new Persian) in Hebrew characters, the same way Christians used Syriac script to write Persian. The position of non-Muslims varied with time.

Jewish court bankers (jahabidha) are found at the courts of the Buyids, the Ghaznavids, and the Seljuk Sultans. Malik-Shah Seljuk contracted the farming of his Basra properties to a wealthy Jew named Ibn Allan for 150,000 dinars. The influential politician and educator, Nizam al-Mulk, in his famous book Siasat Nameh rejects the employment of dhimmi in governmental services and at the same time provided refuge for his Jewish friend, Ibn Allan, who was eventually drowned as ordered by the Sultan. Under the Seljuk, dhimmis were still segregated in their quarters, paid jizya and wore marked garments. They appointed their own religious officials subject to approval by the Muslim authorities. The Jews were largely occupied in trade and commerce. The Jewish traveler Benjamin of Tuleda reports that large Jewish and Christian communities existed in many of the larger cities. He visited the area after the death of Sultan Sanjar (1157) and mentions Jewish communities in Hamadan, Isfahan, Nihavand, Shiraz, Nishapur and Baghdad. On the whole, there appears to have been little discrimination against the dhimmis other than the usual restrictions.

In one incident a prominent Jew, Abu Sad Samha, successfully made a claim against Abu Shuja, the Minster responsible for dhimmis. He claimed that Abu Shuja had failed to protect the Jews and managed to get the Minster sacked. Samha worked for Malik-Shah and was a friend of Nizam al-Mulk. At the same time, Malik-Shah in a new decree made it obligatory for the dhimmis to wear distinguishing marks on their clothes. Such orders were issued from time to time, which indicates that these restrictions were not constantly enforced. However, the Jewish clans who supported the Ismaili movement were gravely punished and massacres took place in the Zagros and Luristan regions.

The Mongol dynasties were a lot more tolerant of the religious minorities. Under the Mongol leader, Hulagu (1258 AD), the concept of the dhimmi and the division between "believers" and "non believers" were abolished. Once again, large numbers of non-Muslims appear in the government institutions. For the first time a substantial Judeo-Persian literature movement emerges and jizya ceased to exist for a while. It was restored and quickly abolished by Ghazan and reintroduced by Oljeitu and this time for good. The Mongol Emperor Arghun appointed Jewish physician Sa’d al-Daula of Abhar as his Prime Minister. The act alienated the Muslim population and created resentment. The Minister was executed in 1291 and the Jewish quarters were savagely ransacked in Tabriz and Baghdad. Rashid al-Din Fazhl Allah Hamadani was another famous physician and historian from Jewish background who served the Il-Khan Oljeitu. He is known as the greatest minster of this dynasty and wrote the famous history of the Mongols from the beginning to the time of Ghazan Khan. He was also put to death in 1318.  His famous library of 60,000 books was ransacked and the suburban area in Tabriz, rub-i Rashidi (Rashidi quarter), build by Rashid al-Din was looted. His severed head was taken to Tabriz and carried through the town with cries of: "this is the head of the Jew who abused the name of God; may God’s curse be upon him". In 1399, his remains were exhumed and reburied in a Jewish cemetery. Rashid al-Din is credited with a major administrative and tax reform while serving as a minister and is known as the most important historian of his time. No doubt his demise was politically motivated as well.

The next major change comes with the Safavids in 16th century. Shi’ism is introduced as the state religion. A religious hierarchy is established with unlimited power and influence in every sphere of life. The concept of "ritual pollution" (najes) of the non-Muslims is introduced. The Safavid policies with respect to religious minorities were contradictory and varied depending on the strength of the king. For example, at times Christians were supported and were extensively involved in the silk trade. At other times Christians along with others were persecuted.

Suffering and persecution of religious groups (particularly the Sunnis) becomes a norm. This period is one of the worst with respect to human rights in Iran. Jewish chronicles are full of accounts of massacres, forced conversion to Islam and mistreatment. New institutions were created; nasi became the head of the Jewish community assisted by the rabbi, mullah (a Jewish one), or dayyan. The nasi was responsible for the prompt payment of jizya to local authorities. All relations between Iranian Jews and others outside the country were severed. Christians and Zoroastrians were subjected to the same harsh treatments, though the Sunnis suffered the most. Segregation became a reality again for all minorities and Jewish Ghettos were reinforced. The reports by European travelers and missionaries describe the tragic situation of the Jews and other religious minorities. Jews were forced to wear both a yellow badge and a headgear, and their oaths were not accepted in courts of justice. A Jew who converted to Islam could claim to be the sole inheritor of the family property, to the exclusion of all Jewish relatives. If one Jew committed a crime or an illegal act, the whole community would be punished (other religious minorities were subjected to the same harsh treatments though treatments varied according to the ruler and the time).