His unsuccessful face-off with the West led to a CIA-backed coup and domination by the United States until 1979 through the Shah of Iran's regime.
Elected to Iran's first Parliament in 1906, Mossadegh was in and out of government more than once. But after two decades in retirement, the son of a princess made a comeback in the parliamentary elections of 1943.
He was many things to many people - US officials found him ‘witty, affable and honest’ while one British diplomat called him a ‘wily Oriental who looks like a cab horse’.
Big business rules
But Mossadegh was a man of high principle. This set him on a collision course with the West - especially with the Anglo-Iranian Oil Company.
The British company developed Iran's reserves in return for an incredibly unfair share of the profits - paying the government only around 15% of the tens of millions in revenue.
The 1950’s Abadan, the company's centre of operations, was a colonial settlement where, for a short while, limited segregation was practised with signs posted in some places “For Non-Iranians Only”.
According to one historian, Stephen Kizner, British administrators ''enjoyed handsome homes with terraces and manicured lawns'' while Iranian workers ''lived in slums and long dormitories with only primitive sanitation.''
''We tried to get the blockheaded British to have their oil company make a fair deal with Iran''
Iranian attempts to renegotiate the terms of the oil concession failed, largely because of the stubbornness of the company - which the British government backed unhesitatingly.
In 1951, Iran's Parliament elected Mossadegh prime minister with a mandate to nationalize the oil company.
This set up a clash between Mossadegh and the British – supporters of Shah Muhammad Reza Pahlavi, the man the CIA helped to install.
The Americans initially encouraged the British to cut a deal with Mossadegh. After all, during the same period, US oil companies had struck a 50-50 profit-sharing arrangement with the Saudis.
''We tried to get the blockheaded British to have their oil company make a fair deal with Iran,'' lamented President Harry Truman.
Eisenhower supports Shah
But Mossadegh's 1951 nationalization was too much for the UK. The British discouraged potential customers from buying Iranian oil and their secret services began plotting Mossadegh's fall.
They found willing accomplices in the Eisenhower Administration, which came to power in 1953 fearing the country was ripe for a coup by the communist Tudeh Party.
Soon, Kermit Roosevelt, grandson of Theodore and the CIA's Middle East chief, was on his way to Tehran.
Shah replaces elected PM
Roosevelt's first coup attempt, on 15 August 1953, was foiled by loyalist army officers. But Mossadegh's naivete played into Roosevelt's hands, letting his guard down when the Shah, whom he thought had been behind the coup, fled to Rome.
Less than a week later, Roosevelt's military putsch successfully removed Iran’s elected prime minister from power for ever. After three years in prison, Mossadegh spent the rest of his life under house arrest at his country estate. He died in 1967.
Roosevelt died in 2000, believing the coup “right and necessary”.
The Shah's bloody and dictatorial rule created enormous pent-up anger, which led to an Islamic government detested by US administrations for more than 20 years.
The anniversary should have been a warning to would-be “regime changers”, but it has come too late.
Only time would tell if Iraq and Afghanistan will become what the US wants them to be, but “nation building” seems destined to remain a precarious life consuming occupation.