Since the 1970s, scholars of contentious politics have employed political process and opportunity structure models to analyze the emergence, trajectory, and outcome of the interactions between states and social movements (most notably Charles Tilly, Doug McAdam and Sidney Tarrow). These studies aptly identify state policies as the most critical factor in shaping the responses of social movements. Yet these studies have been limited by their almost exclusive focus on the interactions between states and contenders within Western democracies. In this paper, I re-theorize and extend the political opportunity structure model by applying it to an authoritarian context, namely post-revolutionary Iran. Drawing on new data that I gathered from census figures, state and oppositional newspapers, and interviews with dissidents and state officials, I offer answers to the following questions: first, why and under what circumstances does an authoritarian state allow certain forms and degrees of contention despite the state’s continued repressive capacity? Secondly, what are the outcomes of the strategic interactions between this state and its contenders? At this juncture, I examine the interactions between state repression and oppositional currents and illustrate that despite the state’s violent repression of dissidents during the 1980s, the decline of social movements, and the demobilization of many well-organized and armed opponent groups, contenders returned to the political scene in the early 1990s with new forms of activism. Unlike activists during the 1980s, they implemented and continue to utilize non-violent tactics and innovative repertoires. I demonstrate that novel forms of protests were partially tolerated and unintentionally facilitated by the state due to its devastating loss of legitimacy in the aftermath of its failure to achieve its objectives in the Iran-Iraq War, its massive abuse of human rights in the 1980s, sweeping demographic changes, and the fragmentation of the ruling elite after the death in June 1989 of the charismatic leader and only unifying figure of the Islamic regime, Ayatollah Khomeini. The fragmentation of the ruling elite, the complex structure of political systems in Iran, and the existence of many formal and informal competing centers of power provided the contenders with new space and opportunity for mobilization. The weakening of the state’s legitimacy and its standing impelled it to open partially in order to stabilize its position. I conclude that such opening increases the opportunity for the emergence of non-violent social protests for participation and mobilization, which ultimately may promote democratic transformation in the long run.