The article surveys the historical and current state of cultural relations between the Republic of Azerbaijan and the neighboring Islamic Republic of Iran, and discusses the main directions and potential opportunities of further cultural cooperation. The centuries-old cultural affinity and coexistence have been key to the expansion of bilateral relations; the common cultural heritage led to a long-standing relationship between the two countries - even during the Soviet era. After Azerbaijan regained its independence, Azerbaijan-Iran cultural relations have begun to further expand and deepen. During the early years of Azerbaijan’s independence, Iran favored the religious dimension of cultural relations, which later caused some problems in the relationship. But over time, the signing of numerous documents on cultural cooperation between the two countries, and the establishment of an appropriate legal base enabled the relationship to cover various spheres in this direction. From 2003, cinema, music, theater and literature have played an important role in cultural relations between the two countries; in addition, significant steps have been taken to boost ties in science and education. In this regard, Iranian culture days in Azerbaijan and Azerbaijani cultural days in Iran are being used as a successful format for mutually expanding cultural ties. The declaration of 2017 as the Year of Islamic Solidarity in Azerbaijan has had a positive impact on Azerbaijani-Iranian cultural relations, and revealed the potential for greater cooperation. At this juncture, the paper outlines specific proposals for the realization of this potential and further expansion of cultural relations.