The son of an Iranian public official, Mohammad Mossadegh grew up as a member of Iran's ruling elite. He received a doctor of law degree from the University of Lausanne in Switzerland and then returned to Iran in 1914 and was appointed governor general of the important Fars province. He remained in the government following the rise to power of Reza Khan in 1921 and served as minister of finance and then briefly as minister of foreign affairs. Mosaddeq was elected to the Majles (parliament) in 1923. When Reza Khan was elected shah in 1925, however, Mosaddegh opposed the move and was compelled to retire to private life.

Mosaddegh reentered public service in 1944, following Reza Shah's forced abdication in 1941, and was elected again to the Majles. An outspoken advocate of nationalism, he soon played a leading part in successfully opposing the grant to the Soviet Union of an oil concession for northern Iran similar to an existing British concession in southern Iran. He built considerable political strength, based largely on his call to nationalize the concession and installations in Iran of the British-owned Anglo-Iranian Oil Company. In March 1951 the Majles passed his oil nationalization act, and his power had grown so great that the Shah was virtually forced to appoint him premier.
A continuing struggle for control of the Iranian government developed between Mosaddeq and the Shah. In August 1953, when the Shah attempted to dismiss the Premier, mobs of Mosaddegh followers took to the streets and forced the Shah to leave the country. Within a few days, however, Mosaddegh's opponents, with U.S. support, overthrew his regime and restored the Shah to power. Mosaddegh was sentenced to three years' imprisonment for treason and, after he had served his sentence, was kept under house arrest for the rest of his life. The Iranian oil-production facilities remained under control of the Iranian government.

Mosaddegh's personal behaviour, which included wearing pajamas for numerous public appearances; speeches to the Majles from his bed, which was brought into the chambers; and frequent bouts of public weeping, helped focus world attention upon him during his premiership. Supporters claim the behaviour was a result of illness; detractors say he had a shrewd sense of public relations.