stylistic:style_transfer
Zoroastrian era

Under Median rule, a commercial entrepôt began to show signs of more sedentary urbanism, steadily growing into a noteworthy regional center that benefited from the exceptionally fertile soil on the banks of the Zayandehrud River, in a region called Aspandana or Ispandana.

When Cyrus the Great unified Persian and Median lands into the Achaemenid Empire, the religiously and ethnically diverse city of Isfahan became an early example of the king's fabled religious tolerance. It was Cyrus who, having just taken Babylon, made an edict in 538 BCE declaring that Jews in Babylon could return to Jerusalem. Later, some of the Jew immigrants settled in Isfahan instead of returning to their homeland. The 10th-century Persian historian Ibn al-Faqih wrote:

When the Jews emigrated from Jerusalem, fleeing from Nebuchadnezzar, they carried with them a sample of the water and soil of Jerusalem. They did not settle until they reached the city of Isfahan, whose soil and water was deemed to resemble that of Jerusalem. Thereupon they settled there, cultivated the soil, raised children and grandchildren, and today the name of this settlement is Yahudia.

The Parthians (247 BCE – 224 CE), continued the tradition of tolerance after the fall of the Achaemenids, fostering a Hellenistic dimension within Iranian culture and the political organization introduced by Alexander the Great 's invading armies. Under the Parthians, Arsacid governors administered the provinces of the nation from Isfahan, and the city's urban development accelerated to accommodate the needs of a capital city.

The next empire to rule, the Sassanids (224–651 CE), presided over massive changes in their realm, instituting sweeping agricultural reforms and reviving Iranian culture and the Zoroastrian religion. Both the city and region were then called by the name Aspahan or Spahan. The city was governed by a group called the Espoohrans, who descended from seven noble Iranian families. Extant foundations of some Sassanid-era bridges in Isfahan suggest that the Sasanian kings were fond of ambitious urban-planning projects. While Isfahan's political importance declined during this period, many Sassanid princes would study statecraft in the city, and its military role increased. Its strategic location at the intersection of the ancient roads to Susa and Persepolis made it an ideal candidate to house a standing army, which would be ready to march against Constantinople at any moment. The words "Aspahan" and "Spahan" are derived from the Pahlavi or Middle Persian meaning 'the place of the army'.

Although many theories have mentioned the origins of Isfahan, little is known of it before the rule of the Sasanian dynasty. The historical facts suggest that, in the late 4th and early 5th centuries, Queen Shushandukht, the Jew consort of Yazdegerd I (reigned 399–420), settled a colony of Jew immigrants in Yahudiyyeh (also spelled Yahudiya), a settlement 3 kilometres (1.9 mi) northwest of the Zoroastrian city of Gabae (its Achaemid and Parthian name; Gabai was its Sasanic name, which was shortened to Gay (Arabic 'Jay') that was located on the northern bank of the Zayanderud River (the colony's establishment was also attributed to Nebuchadrezzar, though that's less likely). The gradual population decrease of Gay (Jay) and the simultaneous population increase of Yahudiyyeh and its suburbs, after the Arab conquest of Iran, resulted in the formation of the nucleus of what was to become the city of Isfahan. The words "Aspadana", "Ispadana", "Spahan", and "Sepahan", all from which the word Isfahan is derived, referred to the region in which the city was located.

Isfahan and Gay were supposedly both circular in design, which was characteristic of Parthian and Sasanian cities. However, this reported Sasanian circular city of Isfahan has not yet been uncovered.