Many countries with an early outbreak of SARS-CoV-2 struggled to gauge the size and start date of the epidemic mainly due to limited testing capacities and a large proportion of undetected asymptomatic and mild infections. Iran was among the first countries with a major outbreak outside China. Using all genomic sequences collected from patients with a travel link to Iran, we estimate that the epidemic started on 21/01/2020 (95% HPD: 05/12/2019 – 14/02/2020) with a doubling time of 3 days (95% HPD: 1.68 – 16.27). We also show, using air travel data from confirmed exported cases, that from late February to early March the number of active cases across the country were more than a hundred times higher than the reported cases at the time. A detailed province-level analysis of all-cause mortality shows 20,718 (CI 95%: 18,859 – 22,576) excess deaths during winter and spring 2020 compared to previous years, almost twice the number of reported COVID-19-related deaths at the time. Correcting for under-reporting of prevalence and deaths, we use an SEIR model to reconstruct the outbreak dynamics in Iran. Our model forecasted the second epidemic peak and suggests that by 14/07/2020 a total of 9M (CI 95%: 118K – 44M) have recovered from the disease across the country. These findings have profound implications for assessing the stage of the epidemic in Iran and shed light on the dynamics of SARS-CoV-2 transmissions in Iran and central Asia despite significant levels of under-reporting.