Islamic financial development has been proposed as one of the key instruments for achieving sustainable economic growth in Islamic countries. The present study aims to investigate the impact of Islamic financial development on Iran's economic growth by employing an endogenous growth model and the Autoregressive Distributed Lag (ARDL) approach over the period 1996–2023 . In this study, the total volume of facilities granted based on Islamic contracts was considered as the main indicator of Islamic financial development, and Gross Domestic Product (GDP) was used as a proxy for economic growth. The results of data analysis indicate that Islamic financial institutions, including banks and financial entities, play an effective role in financing economic projects and increasing investment in Iran. The research findings suggest that Islamic financial development has a positive and significant effect on Iran's economic growth. This finding aligns with the objectives set forth in Iran's Vision 2025 document and the general policies of the resistance economy aimed at developing the Islamic financial system. Furthermore, the results indicate that the degree of trade openness and the inflation rate had, respectively, a positive and significant effect, and a negative but insignificant effect on economic growth. In addition, consistent with theoretical foundations, labor and capital variables also exhibit a positive and significant effect on economic growth.