Nomadic tribes of Central Asia, which were made up of ancient Iranian peoples, may have developed the first rugs around 500 B.C., when they realized they could use the hair of their sheep and goats to make floor coverings, rather than killing their livestock and using their fur for carpets. The first rugs were either flat-woven on a loom, or hand-knotted--a method in which weavers tied yarn around the long threads of the rug's foundation. This method could take a year or longer to make an area rug.
The oldest hand-knotted Persian rug in existence is the Pazyryk Rug. It was discovered in 1949 by Russian archaeologists, in a tomb of an ancient Iranian Scythian chief on a Siberian mountain. Because it was covered in permafrost, it was preserved. The tombs were 2,400 to 2,500 years old. The rug, now in a museum in Leningrad, has 232 knots per square inch. Other hand-knotted rugs generally range from 25 to 100 knots per square inch.
The Persian rug is widely considered to have reached its peak, design-wise, during the Safavid dynasty of the 16th and 17th centuries in Iran. During this time, carpet factories sprang up in several towns, spawning specific rug designs named after the places they were created: Herat, Tabriz, Kerman, Isfahan and Kashan.
Rug weaving also took place in the royal court of Shah Abbas, who came to power in the late 16th century. He moved the capital of Persia from Qazvin to Isfahan, where he set up a carpet workshop. The Shah's court designers made silk carpets with gold and silver embellishments. Two of the finest Safavid carpets are still in existence and can be seen at London's Victoria and Albert Museum and the Los Angeles County Museum. They're called the Ardabil rugs because they both come from the mosque at Ardabil.
After Nader Khan became Shah of Iran in 1736, he destroyed Isfahan, and Persian rug-making entered a period of drought. The only people making rugs in Persia at this time were nomads and craftsmen in small villages. Rug-making didn't pick back up again until the beginning of the Qajar dynasty's period of power, which began in 1794. The Qajars valued craftsmanship. Nasser e-Din Shah, who ruled from 1848 to 1896, forbade the use of aniline dyes in rug-making, because these dyes were not colorfast. At the tail end of the Qajar dynasty, in the late 19th century, export of Persian rugs began. Companies from the U.S., England and Germany built factories in Iranian cities and started producing their own Persian rugs. Merchants exported rugs from Tabriz to Istanbul, and from there into Europe.
Persian rugs today are both handmade and machine-made, with the former often costing more than the latter. Most rugs are made of wool, but simpler ones are made from cotton, and more luxurious ones are silk. Craftspeople pass the techniques of weaving and dying from generation to generation through oral tradition, rarely writing down their methods. Rug-making is the most practiced craft in Iran. Tribal designs differ from village and city designs, and each has its own history.