The main purpose of this thesis is twofold. First, a translog production function is applied to estimate total factor productivity (TFP) for eight different Iranian industries. Second, the effect of main economic factors such as GDP, industry value added, liquidity, taxes, inflation, interest rate, and exchange rate on TFP is analyzed. Two digits yearly data for industries are used. The data covers the period of 1971 to 2006. The production function includes both labor and capital inputs. Since the data for capital is not available a proper method is applied to estimate its level for entire period. The real value added is used as industry output. All nominal values are converted to real values using GDP deflator (1997 as a base year). In estimating the level of TFP two steps are followed: 1. A translog production function is estimated for each industry, 2. Applying a Wald test, industries followed translog discriminated from Cob-Douglas production function. The results show that TFP is mainly affected by GDP and industry value added. Among industries, the machinery and equipment industries (ISIC 38) are affected mainly by the economic factors followed by the chemical industries (ISIC 35). Keywords: Production function, total factor productivity, large Industries, economic factors, ordinary least squares