The institute traces its origins to a 1925 Iranian law decreeing the compilation of an official Persian dictionary. Work on the dictionary was begun by Dehkhoda, and upon his death, his residence was named The Dehkhoda Institute, and housed the academic staff from several Iranian universities who compiled the dictionary.
The institute's origins can be linked to a 1925 decree in Iran that mandated the creation of an official Persian dictionary. Dehkhoda initiated this project before his death, and after his passing, his home was renamed The Dehkhoda Institute, which served as the central location for academics from Iranian universities who contributed to the dictionary's completion.