The European rivalry over Iran’s raw materials and human resources (cheap labor) took German entrepreneurs to the north-western city of Tabriz in early twentieth century, where they established the carpet weaving factory of Persische Teppich Gesellschaft (PETAG) as yet another project of global capitalism. The women, children and men who were employed there as weavers shaped a new range of carpet industry labor. From the social perspective, this industry introduced nomads and villagers to urban settled social life. The large carpet factory changed the image of carpet weaving as being a poor, family-oriented, regional industry. Along with this shift in the nature of manufacturing and trade, the social relations between weavers, masters, merchants and managers also transformed. By investigating the establishment and operations of PETAG’s factories in Iran, this paper reveals how a new social class developed around PETAG factories’ labor as a consequence of the domestic industrialisation and global imperialism that the company’s actions represent.