The sequence of seismicity in the Dasht-e-Bayaz and Zirkuh region of northeastern Iran, which includes 11 destructive earthquakes within a period of only 30 years, forms one of the most outstanding examples of clustered large and intermediate-magnitude seismic activity in the world. We perform a multiple-event relocation analysis, with procedures to remove systematic location bias, of 169 earthquakes, most of which occurred in the period 1968–2008, to better image the distribution of seismicity within this highly active part of Iran. The geographic locations of the clustered earthquakes were calibrated by the inclusion of phase arrivals from seismic stations at short epicentral distances, and also by matching the relative locations of the three largest events in the study to their mapped surface ruptures. The two independent calibration methods provide similar results that increase our confidence in the accuracy of the distribution of relocated epicentres. These calibrated epicentres, combined with the mapping of faults from high-resolution satellite imagery, and from an InSAR-derived constraint on fault location in one case, allow us to associate individual events with specific faults, and even with specific segments of faults, to better understand the nature of the active tectonics in this region during the past four decades. Several previous assumptions about the seismicity in this region are confirmed: (1) that the 1968 August 30 Mw 7.1 Dasht-e-Bayaz earthquake nucleated at a prominent segment boundary and left-step in the fault trace, (2) that the 1968 September 11 Mw 5.6 aftershock occurred on the Dasht-e-Bayaz fault at the eastern end of the 1968 rupture and (3) that the 1976 November 7 Mw 6.0 Qayen earthquake probably occurred on the E–W left-lateral Avash Fault. We show, in addition, that several significant events, including the 1968 September 1 and 4 (Mw 6.3 and 5.5) Ferdows earthquakes, the 1979 January 16 (Mw 6.5) and 1997 June 25 (Mw 5.9) Boznabad events and the 1979 December 7 (Mw 5.9) Kalat-e-Shur earthquake are likely to have ruptured previously unknown faults. Our improved description of the faulting involved in the 1968–1997 earthquake sequence highlights the importance of rupturing of conjugate left- and right-lateral faults in closely spaced events, or potentially even within a single earthquake, as was likely the case at the eastern end of the 1979 November 27 (Mw 7.1) Khuli-Buniabad main shock. The high level of clustered seismic activity probably results from the simultaneous activity on left- and right-lateral faults, an inherently unstable arrangement that must evolve rapidly. The combination of high-resolution satellite imagery and calibrated earthquake locations is a useful tool for investigating active tectonics, even in the absence of detailed field observations.