Two sets of power relationships have emerged in the political system of the Islamic Republic of Iran: official, institutional relationships outlined in the Constitution, and unofficial, informal ones existing between and within groups and clusters of powerful individuals and institutions. The juxtaposition of informal factional alliances with the formal institutions of power has resulted in the development of a precarious balance within the state, as ‘hardliners’ and ‘softliners’ vie for greater influence and the adoption of their agendas as official state policy. The ensuing results have been two-fold. On the one hand, the emergence of multiple centers of power has enhanced the extent and reach of the state in relation to various social strata, thus bestowing it with considerable durability and staying power. On the other hand, the existence of multiple official and unofficial venues for competition has sharpened the tenor and substance of factional rivalries. For the most part, each of the factions has so far been able to balance out the influence and agendas of the other. At the same time, however, since the ‘softliners’ by and large advocate greater political liberalization, these very factional rivalries have had some modest consequences in opening up the Iranian polity. Ultimately, the pace and direction of political liberalization in Iran will depend on the outcome of the ongoing rivalry that is currently being played out within official state institutions and unofficial power-cliques.