The majority of economic growth theories only take into account the role of labor and capital in the production function; therefore, they neglect the role of natural recourses and the laws of physics which govern them. There are some which take into account the role of natural resources, but these few models mainly attempt to indigenize the use of resources like oil and gas in economic growth and they fail to consider usage limitations imposed by the laws of thermodynamics. In fact there is no research present to illustrate the role of useful work obtained from consuming natural resources on economical growth in Iran . The present study offers a systematical view for the occurrence of economical growth by consuming natural resources and obtaining useful work. The model presented in this study whilst abiding by the laws of thermodynamics, takes into account the technical efficiency of converting natural resource exergy to useful work and by doing so, it practically translates the phenomena of “technological progress” which is commonly used in growth literature, into the production function. Using this theory of growth and annual data for the period of 1967 to 2002, the Iranian economic growth model is estimated. The estimation is further analyzed to determine the effect of technological progress on the consumption of natural resources and thus on the growth obtained in this period. Due to the dynamic nature of this model, a dynamic growth trajectory is obtained for each factor of production which in turn can also be used in explaining growth. The results show that at the beginning of the period (1967-1988), most of the obtained growth seems to be due to the substitution of resource using technologies for human labor and increases in the scale of production. However, towards the end of the period, production has reduced its dependence on natural resources by increasing the technical efficiency of conversion and also adding more value – as embodied information-to durable products.