When the Safavid government lost its dominance and authority over the main religious centers, particularly in the region of Iraq, it sought to emphasize and draw attention to the most important pilgrimage center within Iran – the sacred shrine of Imam Reza (AS). Especially the innovation and ingenuity of Shah Abbas in this case brought about many significant achievements and consequences. During the reign of Shah Abbas I (996–1038 AH / 1588–1629 AD), Mashhad experienced considerable growth and development, such that not only did it change the social structure of the city, but also caused a comprehensive shift in the overall policies and economic strategies of the Safavid state. This research, using a descriptive-analytical method, aims to answer the following essential questions: What influence did Shah Abbas I’s policies have on the expansion and development of Mashhad? Whether the evolution and development of Mashhad caused the endogenous development of Iran? These findings show that after the Safavids’ shift in their strategy from emphasizing Iraq’s holy centers, the shrine of Imam Reza (AS) replaced them as the focus of attention, and to some extent, travel to Hejaz was influenced by it. This policy also prevented the outflow of currency from Iran. Development of internal trade routes, increased security, and civil construction planning brought considerable growth in economic exchange and production and public welfare-elevating Iran to a new level that reclaimed many privileges previously conceded to the Ottoman Empire.