Iran-Pakistan relations have had a distinct characteristic over the past five decades and Islamabad’s clandestine transfer of nuclear technology and materials to Iran underlines its significance. Political and strategic imperatives have formed the basis of their close relationship despite divergence of interests and political outlook on regional and global issues. Both the countries have tried to reconcile the differences and consolidate their ties. Iran’s concerns regarding the perceived dangers of containment by the US, the challenges flowing from developments in Iraq and Afghanistan, the need to ensure balance of power with Saudi Arabia and earlier Iraq, and its concerns about the sectarian violence in Pakistan have deeply influenced the vitality of Iran-Pakistan relationship. This paper traces the evolution of Iran- pakistan relations and argues that the politico-strategic contours of the South-West Asian region will be shaped as a result of divergent developments in Iran and Pakistan – Iran’s improvements in ties with India and Pakistan’s relations with the US.