This article examines the growth and change through time of Kuy-e Narmak, a housing neighbourhood developed in the 1950s under the auspices of Mosaddeq’s Modernization Program. The project was designed by a group of young-leading European-educated Iranian architects that collaborated with the government to develop affordable housing solutions in Iran. To design this project, these architects advanced solutions that explored a cross-pollination between the principles of the functional city, and references from vernacular architecture. Over the last 6 decades, the number of households living in Narmak increased dramatically, from the initial goal of accommodating 7500 families, to the 90,000 families that currently live there. This article discusses the extent to which the initial design decisions were instrumental to cope with this extraordinary increase in the district’s density. We have used typological and morphological analysis, combined with site surveys and interviews to investigate the district’s growth and change through time. This article argues that the designer’s critical combination of modernist planning concepts with elements borrowed from Iran’s vernacular tradition resulted in a socially inclusive urban community. The plan’s rigid urban form has become instrumental in defining a neutral background to accommodate the ever-changing social and spatial practices of its inhabitants.