It was established by the initiative of Reza Shah, and mainly by Hekmat e Shirazi and Mohammad Ali Foroughi, all names in the nationalist movement of the time.

[citation needed] The members of the academy included a number of notable literary figures and highly celebrated scholars upon its foundation,[3] including Abbas Eqbal Ashtiani, Mohammad-Taqi Bahar, Ali-Akbar Dehkhoda, Mohammad Ali Foroughi, Badiozzaman Forouzanfar, Homayun Forouzanfar, Qasem Ghani, Abdolazim Gharib, Mohammad Ghazvini, Mohammad Hejazi, Ali-Asghar Hekmat, Mahmoud Hessabi, Mohammad-Ali Jamalzadeh, Ahmad Matin-Daftari, Saeed Nafisi, Ebrahim Pourdavoud, Isa Sadiq, Zabihollah Safa, Ali Akbar Siassi, and Rashid Yasemi.

[citation needed] The academy was a key institution in the struggle to re-build Iran as a nation-state after the collapse of the Qajar dynasty.

During the 1930s and 1940s, the academy led massive campaigns to replace the many Arabic, French, and Greek loanwords whose immense use in Persian during the centuries preceding the foundation of the Pahlavi dynasty had created a literary language considerably different from the spoken Persian of the time.

[citation needed] The attention of the academy has also been towards the persistent infiltration of Persian, like many other languages, with foreign words, as a result of the globalization process.

The Iranian law requires those equivalents to be used in the official media, governmental affairs, and product management of all companies.