Iran climbed ten places to 27th in the latest FIFA rankings released on Thursday.
Team Melli has been unbeaten since June 2015, winning in 13 out of its last 17 international outings.
The rise comes following back-to-back wins in recent World Cup qualifiers against Uzbekistan (1-0) in Tashkent and South Korea (1-0) in Tehran.
Iran still is the highest ranked team in Asia, followed by Australia (40), South Korea (44), Uzbekistan (48) and Japan (51).
Argentina maintained top spot with World Cup champion Germany moving into second from third.
Olympic champion Brazil jumped into third with Belgium and Colombia slipping to fourth and fifth respectively.