Despite fierce opposition, Sufism continued to exist until the end of the Qajar period. There were still many monasteries in Iran and pashmina-clad Sufis were seen in the cities. But with Reza Shah's coming to power, Sufism declined to the extent that at the end of his reign, there was little sign of Sufis in Iranian society. The Khanqahs were abandoned and they no longer had the prosperity of the past; the Sufis had abandoned the Sufi turbans and put on the traditional clothes of the time. This article examines the political, economic, and intellectual grounds of the decline of Sufism in the First Pahlavi period and recounts their role in the decline of Sufism. The sharp criticism of Sufism and its teachings by the intellectuals of this period was one of the main reasons for the decline of Sufism in the first Pahlavi period; for example, Taghi Erani - who is the first significant figure of Iranian Marxism - considered mysticism/sufism to be the opiate of the masses. According to him, the function of mysticism/sufism was nothing but subjugating the poor classes of society (slaves and the like). Despite the influence of these criticisms on many elites of the society, the main reason for the decline of Sufism should be sought in the laws enacted by the Pahlavi government in matters such as endowments. In accordance with these laws, endowments - which were the most important sources of income for Khanqahs - were confiscated and their supervision was left to the government; by making the livelihood of Sufis more difficult, it practically made monasticism and seclusion impossible and prepared the ground for the dismantling of Sufism.