Ivanković was appointed to the head of the Iranian team on January 29, 2002, and reappointed on October 3, 2003. His team won the third place at the 2004 Asian Cup, and succeeded in qualification for the 2006 FIFA World Cup.

His defensive tactics and being unwilling to take risks had been criticized by sections of Iranian fans and the Iranian media. He was especially criticized by some for purportedly using a relatively inflexible starting line-ups, formations and tactics. Portions of fans and the media accused him for an apparent failure to fix the tactical problems and avoiding the call up of some top performing Iranian players. He was also accused of avoiding strong opponents in friendly games before the World Cup, although the friendly game against Croatia, which ended in a 2-2 draw, and the known difficulty in finding willing opponents, due to political issues, went some way in dispelling these accusations.

Iran, at their opening game at the World Cup, showed a scintillating first half performance against Mexico, but conceded two goals to collapse in what many call the 'coaches half'.