Abstract: The purpose of the current study is to analyze the correlation of Iranian residential architecture with the environment and its evolutionin respond to the social and cultural variation. These intangible interrelationships are not only represented in physical appearance in the building but also indicate the existing social, cultural and religious notions that were respondent to residential needs. Introverted housing buildings have had sequential connection to public urban spaces, neighborhood units, correspondence with the environment and ecology, emphasis on the privacy and spatial orientation as the most important environmental factors. Every element in Iranian housing is a response to the various requirements simultaneously which implies its functional, aesthetical and structural role in correspondence with the context. The emergence of modern movement and its social, cultural and environmental impacts resulted in fundamental changes in Iranian architecture. Imported architectural elements and principles without any association with the past principles and values caused drastic changes in residential architecture. Therefore, Iranian introverted architecture lost its notions and principles steadily and new architectural elements were replaced without considering its social and cultural consequences. This study investigates Iranian traditional residential architecture and its interrelationship with the environment and context. Borrowing from the primary principles and attitudes in traditional architecture, this study assesses the impact of existing modern movement paradigm and its imported architectural elements. Toward reaching the goal of the study, different traditional and contemporary housing complexes and neighborhood units were observed and evaluated. The results of this study indicates that Iranian traditional residential architecture consisted of outstanding principles which should be reviewed, preserved and combined with new technologies and new circumstances.