Iran has pursued a highly contradictory policy towards Afghanistan. On the one hand, it became a significant beneficiary of the overthrow of the Taliban regime by the US-led military intervention in 2001 in Afghanistan. The new Afghan government established cordial ties with Iran, allowing it to expand its political, economic and cultural influence in the country. Yet Iran has also provided significant support to the Taliban in its campaign to violently upend the political, social and economic processes in the country. This article examines the underlying domestic and regional security dynamics that contribute to this contradictory behaviour. It offers an assessment of how tensions between the United States and the Islamic Republic, as well as Tehran’s growing threat perception following the rise of the Islamic State – Khorasan in 2014, impact on Iran’s policy towards the Taliban. The paper argues that Tehran views the Taliban as an instrument to disrupt the influence of other actors in Afghanistan. The instrumentalisation of the Taliban, however, is likely to be counterproductive for Iranian security in the long run as it contributes to Afghanistan’s instability and insecurity and undermines Iran’s own long-term interests.