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This paper examines US officials’ evolving understanding of Soviet and Tudeh Party capabilities and activity in Iran during 1941-1954. It is based on a large trove of analytical reports and other documents produced by the State Department, the CIA, and other US government agencies and available at the US National Archives – a collection that has not previously been used by scholars focusing on communism in Iran. US officials took a relatively benign view of Soviet and Tudeh activity in Iran during World War II, seeing their growing popularity as a consequence of the extreme inequality and dysfunctional politics that prevailed in Iran and the considerate behavior of Soviet occupation forces (compared to British forces). After the war, the advent of the hawkish Truman administration and the emergence of the Cold War – especially the 1945-1946 Azerbaijan crisis – led US officials to become much more alarmed about the communist presence in Iran. The State Department and CIA devoted considerable resources to monitoring Soviet and Tudeh activity during this period, producing a wealth of information about Soviet policy toward Iran and the size, structure, and strategy of the Tudeh. During the Mosaddeq era, US officials believed the Tudeh was pursuing a “popular front” strategy toward the nationalist movement and growing steadily. However, they did not detect a sharp increase in Tudeh capabilities or an imminent Tudeh threat in late 1952 or early 1953, of the sort that might have justified the coup they undertook in August 1953. Finally, these documents provide important new details about how the Tudeh Party was largely destroyed in the aftermath of the 1953 coup.