In 1963 Iran placed all military factories under the Military Industries Organization (MIO) of the Ministry of War. Over the next fifteen years, military plants produced small arms ammunition, batteries, tires, copper products, explosives, and mortar rounds and fuses. They also produced rifles and machine guns under West German license. In addition, helicopters, jeeps, trucks, and trailers were assembled from imported kits. Iran was on its way to manufacturing rocket launchers, rockets, gun barrels, and grenades, when the Revolution halted all military activities. The MIO, plagued by the upheavals of the time, was unable to operate without foreign specialists and technicians; by 1981 it had lost much of its management ability and control over its industrial facilities.
The outbreak of hostilities with Iraq and the Western arms embargo served as catalysts for reorganizing, reinvigorating, and expanding defense industries. In late 1981, the revolutionary government brought together the country's military industrial units and placed them under the Defense Industries Organization (DIO), which would supervise production activities. In 1987 the DIO was governed by a mixed civilian-military board of directors and a managing director responsible for the actual management and planning activities. Although the DIO director was accountable to the deputy minister of defense for logistics, Iran's president, in his capacity as the chairman of the SDC, had ultimate responsibility for all DIO operations.
By 1986 a large number of infantry rifles, machine guns, and mortars and some small-arms ammunition were being manufactured locally. By 1987 Iran claimed to have manufactured an undisclosed number of Oghab rockets, probably patterned on the Soviet-made Scud-B surface-to-surface missiles the Iranians received from Libya.
Prior to 1989 the ballistic missiles program was responsibility of the missile unit Wakhid-e-Mashachekh of the Revolutionary Guards. In 1989, elements of the Ministry of Defense and the Guards merged to form the Ministry of the Armed Forces Logistics (MODAFL), and their production facilities were merged into the Defense Industry Organization.