In November 1979, after the shah had been allowed entry into the U.S. for medical care, militant Iranians stormed the U.S. embassy in Tehran, taking 66 Americans hostage. Thirteen were soon released, but for the other 53 Iran demanded a U.S. apology for acts committed in support of the shah, his return to face trial (moot after his death in July 1980), and return of the billions of dollars that he was said to have hoarded abroad.

As the hostage dispute dragged on—they were finally released in January 1981—the regime tried to create a new governmental machinery, while coping with economic chaos, internal unrest, and external threats.

Minutes after Ronald Reagan's inauguration as the 40th president of the United States, the 52 U.S. captives held at the U.S. embassy in Tehran, Iran, are releaseed, ending the 444-day Iran Hostage Crisis.