The symbolic leader of the People's Mujahidiin, Maryam Rajavi has been released on bail from a French jail after being held for two weeks on suspicion of terrorism links.
Rajavi was greeted by hundreds of her supporters on Thursday when she arrived at the group's headquarters in Auvers-sur-Oise near Paris.
The Paris Appeals Court on Wednesday ordered Rajavi to post bail of $92,000 before her release.
But she has to remain at the group's headquarters while being investigated on the charge of "association with criminals in connection with a terrorist enterprise".
The decision contradicted the recommendation of state prosecutors, who asked that Rajavi remain behind bars.
Last month, Rajavi and 16 others were placed under judicial investigation, the first step before possible formal charges in France.
They were believed to have links to a terrorist organisation and alleged to have funded terrorist activity after a crackdown by French police on their group.
But Rajavi, who heads the Mujahidiin's political wing, the National Council of Resistance of Iran (NCRI), has denied the charges against her and her associates.
"We haven't committed, and we won't commit, any illegal act either in Europe, the United States, or elsewhere in the world," Rajavi said, according to the text of the speech released by aides after her release.
Sixteen of her associates also remain under investigation.
French officers raided a dozen locations northwest of Paris linked to the group, classified as a terrorist organization by the United States, the European Union and Iran, and initially detained 165 people.
Of the 17 placed under investigation, 11 were locked up. The Paris appeals court ordered the release of two women overnight, and the nine others on Wednesday, with only Rajavi and one other woman ordered to post bail.
Justice Minister Dominique Perben said the release of Rajavi and other exiles did not mean any of the accusations pending against them had been dropped.
"Regarding the release of Iranians, I would like to remind you that this is not a decision on the substance of the case," Perben said.
Rajavi's detention had sparked outrage among her followers.
Self-immolation protests were carried out across Europe and several dozen people observed a hunger strike outside the headquarters of the group's political wing, the National Council of Resistance of Iran (NCRI).
Rajavi is seen by the People's Mujahidiin as the "president-elect" of a future Iranian government.
French authorities have accused the group of making its headquarters in Paris their international base and planning attacks against Iranian interests in Europe.
The group, which has been active in France for 20 years, categorically denies the charges and accused Paris of arresting its followers to please the Iranian government.
"This is nothing but a political case," Shahin Gobadi, a spokesman for the group said.
Iran has requested the extradition of Mujahidiin members being held in France.
French officials say those who are legal residents will not be deported. Rajavi has political refugee status in France, valid until 2006.
The People's Mujahidiin took part in the 1979 revolution in Iran, but the movement was suppressed in the years that followed and its members fled abroad.
Under the leadership of Rajavi's husband Masuud, the military wing of the group took refuge in Iraq in 1986, from where it organized attacks inside Iran.