After the Persian Revolution of 1906-09, Russia sent troops to the northern Persian city of Kazvin to protect its interests there and refused to remove them, in violation of the Anglo-Russian agreement of 1907. William Morgan Shuster (1877-1960), an American serving as Persia's treasurer-general to help put in order its finances, clashed with Russia, which evidently backed an unsuccessful military attempt by former shah, Muhammad Ali (1872-1925), to regain power in mid-1911. The Russians issued two ultimatums for the Persians to remove Shuster, but the national assembly (majlis) rejected both (November 1911). In northern Persia, Russians committed atrocities at Tabriz, took over Azerbaijan, and then advanced on Tehran. Persia's regency government during the minority of Ahmed Shah (1898-1930), with the cabinet, enacted a coup on December 24, 1911, suddenly closing down the assembly, forminga ruling directory, and accepting Russia's demand for the dismissal of Shuster.

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Most serious of all, the hope that the Constitutional Revolution would inaugurate a new era of independence from the great powers ended when, under the Anglo-Russian Agreement of 1907, Britain and Russia agreed to divide Iran into spheres of influence. The Russians were to enjoy exclusive right to pursue their interests in the northern sphere, the British in the south and east; both powers would be free to compete for economic and political advantage in a neutral sphere in the center. Matters came to a head when Morgan Shuster, a United States administrator hired as treasurer general by the Persian government to reform its finances, sought to collect taxes from powerful officials who were Russian protégés and to send members of the treasury gendarmerie, a tax department police force, into the Russian zone. When in December 1911 the Majlis unanimously refused a Russian ultimatum demanding Shuster's dismissal, Russian troops, already in the country, moved to occupy the capital. To prevent this, on December 20 Bakhtiari chiefs and their troops surrounded the Majlis building, forced acceptance of the Russian ultimatum, and shut down the assembly, once again suspending the constitution. There followed a period of government by Bakhtiari chiefs and other powerful notables.