Iran is the only Muslim country that has legislation on embryo donation, adopted in 2003. With an estimated 10–15% of couples in the country that are infertile, there are not any legal or religious barriers that prohibit an infertile couple from taking advantage of Assisted Reproductive Technologies (ARTs).Although all forms of ARTs available in Iran have been legitimized by religious authorities, there is a lack of legislation in all ARTs except embryo donation. By highlighting ethical issues in embryo donation, the paper presents a critical review of the Act of Embryo Donation in Iran. The paper argues that the Act does not provide enough safeguards for the future child and assurance for the safety of the donated embryos. It also does not restrict embryo donation to surplus embryos from infertile couples and is silent about the number of embryos that could be donated by each couple as well as the number of recipients for donated embryos by a couple.The Act is also silent about the issues of genetic linkage (nasab) and heritage which are challenging issues, especially in a conservative Islamic society. As a result, the future child may not inherit from their birth parents, as it is not required by the Act, or from the genetically related parents under the anonymity policy. Finally there is no standard national protocol or guidelines to evaluate the safety of the donated embryos.The paper concludes that despite its benefits, the Act lacks clarity, and it is subject to misunderstanding and confusion.