This research proposes new lenses from which to view the Islamic Republic of Iran, different than the common picture portrayed in the Western World. Based on the theory of basic human values, developed by Professor Shalom Schwartz, this research formulates a new index "Societal Potential for Liberal Democracy" which measures the potential of a society to foster a liberal democracy based on a society's value structure. In order to study the values which characterize the Iranian people and to measure Iran's societal potential for liberal democracy relative to other countries, two separate surveys were conducted in Iran, consisting of over 900 respondents, and including two representative samples of Iranian society. Using the newly formulated index, this research placed Iran 22nd out of 46 countries in a world-wide continuum of Societal Potential for Liberal Democracy, above Egypt, Morocco and Jordan, thus proving the provocative thesis that the greatest potential for democracy in the Middle East lies not in Arab Sunni countries, but rather in the Islamic Republic of Iran. In addition, a significant gap was found between the societal potential for democracy in Iran and the actual level of democracy, indicating a high potential for future regime change. Hopefully this research will help ignite public discourse regarding new courses of actions for dealing with the threat posed by Iran, based on an alliance with the liberal forces discussed in this research, with the objective of promoting liberal democracy in the Islamic Republic.