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Persepolis opens right after the 1979 Iranian Revolution, which results in the downfall of the American-backed dictator known as the Shah of Iran and leads to the rise of the religious hardliners who establish the oppressive Islamic Republic. Marjane Satrapi describes how she used to attend a French co-educational and non-religious school, but how this is outlawed because the Islamic Republic distrusts and rallies against all Western influences. Further, the regime forces all women and girls to wear veils. Marjane’s parents, however, are modern and secular in outlook; though they supported the Revolution again the Shah, who was a despotic ruler, they are alarmed and dismayed at the fundamentalist turn of the new Islamic Republic. Forced to grow up quickly, Marjane begins to learn about the history of Iran and the many invaders and rulers it has had over its centuries’ long history. Her own grandfather was a Persian Prince who was often imprisoned and tortured under the rules of the Shah. She also begins to understand that different social classes exist, and that this is one root of much tension and suffering in the country.

After the Revolution comes to an end and the Shah is ousted, many political prisoners find themselves released from prison, including Siamak and Mohsen, both Revolutionaries who have been in prison for years. They speak of the tortures they experienced and the deaths they witnessed. Thinking of these two men as heroes, Marjane remains disappointed that her own father is not a hero, and that no one in her family is one, either. However, she is enthralled when she meets her uncle Anoosh, who fled Iran to the USSR so that he would not be arrested for his activities against the Shah. However, when he came back to Iran, his disguise was not good enough to keep him out of jail, and there he experienced much degradation. Marjane considers him a hero, and he hands her a bread swan he made while in prison. Unfortunately, soon afterwards, with the new radicalization of the country under the hardline government, the former political prisoners that were released become targets again, and Mohsen gets assassinated, though Siamak manages to sneak out of the country. Anoosh gets arrested, and Marjane is allowed to see him just once before his execution. This is the point at which Marjane rejects God.

Many of Marjane’s family and friends leave the country, but the Satrapis decide to stay in Iran for economic reasons. Soon after, Marjane’s mother gets harassed by men for not wearing her veil, and Marjane and her family go out on their last demonstration against the veil, which turns extremely violent. Soon after that, the Iraq-Iran War breaks out. This is a moment of great nationalism for Marjane, as she desperately wants Iran to defeat its enemy, but as the war goes on she begins to realize the cost of war, heroism, and of so-called martyrdom – something the government regime valorizes – when her friend Paradisse’s father, a fighter pilot, dies while bombing Baghdad. The new war brings many refugees from southern Iran up north to Tehran and many young boys are enlisted into the army. They are given plastic keys painted gold as a symbol of the easy entry one enjoys into paradise after dying for the nation. Marjane and her family see this as a despicable lie, particularly because it is only told to poor people.

During the War, the country’s policing of its people becomes more stringent, and the Satrapis' forbidden wine supply—as people still hold parties as an attempt at normalcy—nearly gets found out. When Marjane’s parents sneak in Western items for Marjane—like posters and sneakers—after their trip to Turkey, two members of the women’s branch of the Guardians of the Revolution nearly arrest Marjane. The Iraqis now use ballistic missiles against Tehran, which are very destructive, and one day the Satrapis' Jewish neighbors’ home gets destroyed, though at first Marjane thought that her own house was hit. Nevertheless, Marjane is traumatized when she sees the severed arm of her dead friend Neda beneath the rubble of her house. Marjane, always rebellious, becomes even more so. She becomes bold, bold enough to slap her principal at school, and she is promptly expelled. Even in her new school she speaks her opinions, and Marjane’s family thinks it best (and safest) that Marjane continue her education in a country that will afford her more freedom. Tearfully, Marjane leaves her family and makes her way to a new life in Vienna, Austria.