This thesis explores the relationship between the structure of capital markets and potential for economic growth in selected developing countries with special focus on Iran. This study looks into the issue of how capital market structures might correlate with the development of the economy as a whole and what choices might be available which would enable capital markets to be able to contribute to the development process. The thesis contains literature review as well as discussion about a theoretical and empirical overview, which presents the fact that over the last two decades, a substantial volume of research has been devoted to understanding and explaining the link between financial development and economic growth. It provides a broad overview of recent financial development theories and empirical studies that hypothesise the existence of positive correlations between financial systems and financial institutions as well as economic growth. The thesis presents the theoretical models of capital market structure; preparing unique discussions on latter issue and its focus is on the evolution of financial development. Part of this thesis is about the feature of Islamic finance. The research has special focus on Iran and renders a clear picture of the financial market in the country; arguing the financial system of the development countries, experiences and agreeable laws, wellestablished markets. This thesis presents a detailed description and structure of the Iranian financial markets - together witfi their peculiarities. The thesis draws on argument that by analyzing indices of the financial structure and by ranking it, three categories of financial structures are recognized in selected developed and developing countries. In this study the required data and statistics are drawn from international sources. The thesis concludes with a set of recommendations of improving the capital structure in Iran. The originality of this thesis lies in the argument of the role of the capital market in the process of économie growth. The thesis defends the latter issues.