In 1978, Ali Naghi Mashayekhi made a system dynamics model for Iran's economy that was able to simulate Iran's socio-economic system. This model that has been built on the basis of microeconomic behavior has a powerful structure. This thesis has made a system dynamics energy-economy model based on Mashayekhi's dynamic model. The former model regards feedback loops between energy sector and the other sectors of the economy. Our model structure is designed in the way that could examine a variety of policies in the case of energy-economy problems that are the main concerns in this context. The energy sector in this model includes 8 subsectors: oil exploration and discovery, oil production, gas exploration and discovery, gas production, energy demand, energy investment, energy technology, and energy trades. Interactions between these subsectors and Mashayekhi's model, which represents Iran's socio-economic structure very well, exhibit a powerful and robust model which could be used for analyzing the complicated feedback structure of Iran's energy-economy system. The thesis results show that applying some policies simultaneously could improve the system behavior. These policies include: 1) allocating bigger share of natural gas produced domestically to inject to the oil wells; 2) economizing domestic energy consumption and restricting energy import 3) investing for increasing the natural gas domestic market share; 4) endeavoring for the sake of improvement of the international political relationships. It is better to perform these policies smoothly for decreasing negative psychic and social impacts of the arising shocks that are consequences of enforcing the policies mentioned. Keywords Simulation, system dynamics, energy-economy model