What is the nature and function of the boundary between insiders and outsiders in the Islamic Republic of Iran? Anyone who looks at the organization of Iranian politics will notice a fundamental distinction which guides the republic’s relations with political actors: Some are allowed to exercise political rights that others are deprived off. We see it in the emblematic screening of political candidates during parliamentary and presidential elections. We also observe it in more subtle expressions of political differentiation such as the ability to organize political parties and propagate one’s views through the media. Those who enjoy such rights are in Iran referred to as ‘insiders’ (khudi). The others, who are deprived of them, are known as ‘outsiders’ (gheir-e khudi). These are not legal terms and at no time occur in the Iranian constitution. They nonetheless refer to a fundamental parameter of politics in the Islamic Republic. The origins of the division go back to the political struggles that occurred in the wake of the 1979 revolution. The showdowns of the early revolutionary years resulted in a compartmentalization of Iran’s political forces which has turned out to be long-lasting. As hegemonic players the followers of Khomeini ruled that political power could not be bestowed on the “enemies of the Islamic Republic”. They thereby laid the ground for a regime political boundary. By this I mean a differentiation in the distribution of political rights and opportunities between insiders and outsiders of a political system. Such differentiation can be based on formal rules or informal practices or, as in the Iranian case, on a combination of both. In either way it skews the playing field in favor of the incumbents. Drawing on fieldwork in Iran, textual analysis and interviews with former regime insiders in the Iranian diaspora, this paper explores the politics of the insider-outsider-boundary from three angles; 1) the “boundary production” or ideological rationale for political exclusion; 2) reformist and conservative critiques of the regime political boundary; 3) the boundary-bending activities of political activists who challenge the compartmentalization of political groups in practice. I argue that; whereas the Iranian ruling system produces political enemies to survive its forward escape has also become a destabilizing factor.