This article focuses on the development of the tobacco industry in Iran during the seventeenth and eighteenth centuries. It uses this discussion as an entry point to inquire about the early modern Iranian economy. Using a wide range of primary and secondary sources, it makes several historiographical interventions. In explaining what the development of a completely new agrarian industry means in Iranian society, the paper suggests that innovation and intensification may not have been completely absent in agriculture and that in contrast to the way some of the available literature tends to argue, the Iranian economy may not have experienced continuous decline in all sectors throughout the seventeenth and eighteenth centuries. In addition, this article contends that the tobacco industry helped bring about the rise of merchants and landowners in Iranian society, and with that the further development of mass consumption and ever-increasing cycles of production and accumulation that expanded the commercialization of agriculture, domestic and international trade networks, and Iran’s agrarian economy.