The study presents an analysis of bilateral relations between the Republic of Azerbaijan (RA) and the Islamic Republic of Iran (IRI) after the Second Karabakh War (SKW), identifying the sources of tension and new trends in their relations. On the one hand, the participation of RA and IRI in large-scale Eurasian transport and logistics projects allows both countries to play a special role in regional politics, and on the other hand, the full-fledged security of the South Caucasus region, including its current position in the system of international relations, largely depends on the level and quality of Azerbaijani-Iranian relations. The purpose of this study is to identify the features and trends of Azerbaijani-Iranian relations after the Second Karabakh War. The author analyzes the reasons for the aggravation of bilateral relations after the SKW in terms of domestic and foreign policy factors. If ethno-political and religious-ideological factors are considered as domestic political reasons, then the nature of the development of relations between Azerbaijan and Türkiye, Azerbaijan and Israel, and Iran and Armenia is assessed as a foreign policy aspect that led to the deterioration of Azerbaijani-Iranian relations. In addition, conducting military exercises by the two countries near the Azerbaijani-Iranian state border, the position of the Iranian authorities against the opening of the Zangezur corridor, and the attack on the Azerbaijani embassy in Tehran at the end of January 2023 also contributed to the deepening of the escalation between the RA and the IRI. Along with this, a new positive trend is also emerging in bilateral relations. The volume of trade turnover between the two countries has traditionally decreased during crisis situations; however, despite the fact that Azerbaijani-Iranian political relations are currently experiencing the worst period in their history, the development of relations in the trade and economic spheres is observed, which is a new trend in the interactions between Baku and Tehran. Thus, not only the problems caused by the COVID-19 coronavirus infection in the economies of the two countries, but also the intensification of work on transport projects in the South Caucasus create conditions for maintaining and increasing the level of trade and economic relations.