The Iran-US relations since 1979 Revolution have remained tension-ridden. Various efforts towards resolution of the sensitive and critical issues between them have failed to bear fruit. The present article looks into the state of these relations from the vantage of Iran’s security environment and how the U.S. policies, particularly since the 2001 occupation of Afghanistan and 2003 war of choice in Iraq, have dramatically affected Iran’s immediate security environment. The paper argues that as a result of the removal of the Taliban and Ba’athist regimes and the emergence of pro-Iran ruling coalitions in Afghanistan and Iraq, Iran’s regional stature and influence was enhanced, which also coincided with simultaneous shrinking of US material and symbolic resources in the region. The article also tries to shed light on the parameters of Iran 's security environment, decision making processes, sources of security and defense policies, which would help towards a better understanding of the reasons and rationale for the still tumultuous relations with the US, including in particular on Iran’s nuclear program. A review of the past U.S. strategies in dealing with Iran as well as of the alternative strategies currently on the table – Containment, Comprehensive and Selective Engagements, Military option – and Iran’s Counter Containment strategy, indicates that given the actual situation in the region a mere continuation of the past might simply prove impossible. A full-scale confrontation or a major reconciliation appears to be the only possible scenarios for the future. The paper concludes that Comprehensive Engagement will instead present a way out of the decades-old conflict with tremendous benefits for the protagonists and the surrounding region.