Dressing in Iran is not so much different from the other countries; however, there is a series of simple rules that must be observed. To summarize, men can wear the same clothes they wear in their own city, just the clothes should not be so tight or too thin. Moreover, you cannot wear short shorts and walk in Iran’s streets. About the women, both tight and thin clothes are banned and they should cover their hair as well. Of course, you do not have to wear all the hair, just cover some part of your hair with a shawl (scarf), and be careful when you are on the street; the shawl does not drop down your hair! In general, the Iranian rule emphasizes on the covering of the body and the hair of women.
Here is more information: Travel Guide to Iran