This study argues, contrary to some opinions, that shadow performance existed in Iran from at least the tenth to the twentieth century. Through a textual analysis of newly discovered ancient texts, two plays specifically, this study shows how shadow performance originated in the Indian subcontinent, was transported from Iran to the historical region now known as Iraq, and then spread to Egypt, developing over time through its historical progression. This study also looks at the reasons for the decline of shadow performance in Iran, including the centuries-old Iranian Sufi criticism of the form and the establishment of the Safavid dynasty, which introduced Shiism as the official religion of Iran in the sixteenth century. Certain Iranian Sufisms considered shadow performance debaucherous until the fifteenth century. After the sixteenth century, influenced by the Turkish Karagöz, shadow performance was considered a theatrical form associated with Sunni infidels. Consequently, shadow performance was replaced with Muharram mourning rituals, ritualistic forms that reflect Shia identity.