This chapter explores the turbulent relationship between Iran and Saudi Arabia since the pivotal year of 1979 – the year of both the Iranian revolution and significant domestic turmoil in Saudi Arabia. Nader Entessar examines how the very different foreign policy objectives by the two regional powers in the Persian Gulf have evolved since 1979. Entessar provides a wide-ranging overview of the national interests and motivations, levels of threat perception and military balance, and changing domestic and foreign policy context that feed into the regional roles of Saudi Arabia and Iran and underscores the point that the projection, and degree, of influence projected by each is not static but fluctuates as domestic, regional, and global political and strategic circumstances themselves shift. Entessar argues that a “diplomacy deficit” has exacerbated volatility in the Persian Gulf and contributed to a zero-sum approach to regional security.