In August 1941, because of the refusal to expel Germans, Britain and the USSR invaded Iran, arrested Reza Shah and sent him into exile, and took control of Iran's communications and prized railroad. In 1942 the United States, an ally of Britain and the USSR during the war, sent a military force to Iran to help maintain and operate sections of the railroad. The British and Soviet authorities allowed Reza Shah's system to collapse and limited the constitutional government's power. They permitted Reza Shah's son, Mohammad Reza Shah Pahlavi to succeed the throne. .
In January 1942, Britain, the Union of Soviet Socialist Republics (USSR) and the United States of America (USA) signed an agreement with Iran to respect Iran's independence and to withdraw their troops within six months of the war's end. The USSR withdrew its troops in May 1946, but tensions continued for several months. This episode was one of the starting events of the emerging Cold War, the postwar rivalry between the United States and its allies, and the USSR and its allies.
Iran's political system became increasingly open as time went on. Political parties were developed, and in 1944, the Majlis elections were the first competitive elections in more than 20 years. The Angelo-Iranian Oil Company, which was owned by the British government continued to produce and market Iranian oil. In the beginning of 1930s, some Iranians began to support to the nationalization of the country's oil fields but after 1946, it caused a major common movement .
Mohammad Reza Shah replaced his father on the throne on September 16, 1941, and wanted to continue the reform policies of his father, but a contest for control of the government soon erupted between the shah and an older politician, the nationalistic Mohammed Mossadegh. Despite his vow to act as a constitutional monarch who would obey to the power of the parliamentary government, Mohammad Reza Shah increasingly involved himself in governmental affairs and opposed or thwarted strong prime ministers.