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Indicators of science and technology (S&T) activity often disadvantage developing countries, due, in part, to incomplete compilation of statistics or to the examination of indicators in isolation. Among the major indicators of S&T activity are research and development (R&D) expenditures and their relationship to gross domestic product, numbers of personnel involved in S&T research, scientific publication output and rankings by scientific discipline, and numbers of patents registered in the international patent systems. A 'composite index of S&T capacity' developed by researchers at the Rand Corporation is described and applied comparatively. We have compiled data on Iranian S&T activity under the following headings: R&D expenditure, population and educational profile, academic personnel, R&D personnel. A scientometric analysis of Iranian S&T publications using the Science Citation Index is presented, and possible shortcomings of this approach discussed. All findings are reported, analysed, and discussed with reference to the various compilations of S&T indicators and to our earlier studies on Iranian scientific publications. In particular we analyse annual distributions of world and Iranian S&T publications, international collaboration of Iranian scientists, journals where Iranian scientists publish and journals they cite, the most productive Iranian scientists and the extent of their influence nationally and internationally, and S&T subject areas in which Iranian scientists excel. We conclude with comments and suggestions for the continued development of Iran's S&T capacity. [ABSTRACT FROM AUTHOR]