Mosaddeq first arrived on the political scene when he was appointed premier in 1951. A fierce nationalist, he immediately began attacking the British oil companies operating in his country, calling for the nationalization of the oil fields. When the British refused to go quietly, Mosaddeq cut off all diplomatic ties to the country.
Furious at the thought of losing control of Iranian oil fields, the Brits looked to the Americans for help. Implying that Mosaddeq was vulnerable to communist influence (despite his public disavowal of socialism), British intelligence agents worked with the CIA to engineer a plot to despose Mossadeq.
Unfortunately, Mossadeq found out. His supporters began taking to the streets in protest, at which point the Shah left the country for "medical reasons." While British intelligence pulled out of Iran shortly thereafter, the CIA decided to continue on covertly.
Working with pro-Shah forces and the Iranian military, the CIA threatened and bribed its way into another organized coup attempt against Mossadeq. Backed by street protests organized and financed by American money, on August 19, 1953, the military overthrew Mossadeq.
After returning to power, the Shah signed over 40 percent of Iran's oil fields to U.S. companies. As for Mossadeq, he was arrested, served three years in prison, and died under house arrest in 1967.
More than three decades later, Secretary of State Madeleine Albright summed up the impact of American influence in Iran:
The Eisenhower administration believed its actions were justified for strategic reasons. But the coup was clearly a setback for Iran's political development and it is easy to see now why many Iranians continue to resent this intervention by America.
Iran continued to be a staunch Cold War ally of the United States until 1979, when an anti-American and anti-Shah revolution deposed the Shah leadership. During protests, angry militants seized the U.S. Embassy and held the American staff hostage until January 1981.