On 14 February 1989, a fatwa requiring Rushdie's execution was proclaimed on Radio Tehran by Ayatollah Ruhollah Khomeini, the spiritual leader of Iran at the time, calling the book "blasphemous against Islam." A bounty was offered for the death of Rushdie, who was thus forced to live in hiding for years to come. The British police gave Rushdie a new identity. On 7 March 1989, the United Kingdom and Iran broke diplomatic relations over the Rushdie controversy.

Meanwhile, further violence occurred around the world, with the firebombing of bookstores. Muslim communities throughout the world held public rallies in which copies of the book were burned. Several people associated with translating or publishing the book were attacked and seriously injured or killed. In late 1990, Rushdie apologised to Muslims and even formally converted to Islam, but recanted a short time later describing it as the "biggest mistake of my life" in an interview he gave to Anne McElvoy of The Times published on August 26, 1995.

On 24 September 1998, as a precondition to the restoration of diplomatic relations with Britain, Iran gave a public commitment that it would do nothing to harm Rushdie. But soon after restoration of diplomatic relations, Iranian authorities reversed themselves and reaffirmed the death threats. In early 2005, Khomeini's fatwa was reaffirmed by Iran's spiritual leader, Ayatollah Ali Khamenei, in a message to Muslim pilgrims making the annual pilgrimage to Mecca. Additionally, the Revolutionary Guards have declared that the death sentence on him is still valid. Iran has rejected requests to withdraw the fatwa on the basis that only the person who issued it may withdraw it.

Salman Rushdie, at Atlanta, said he still receives a "sort of Valentine's card" from Iran each year on February 14 letting him know the country has not forgotten the vow to kill him. He was also quoted saying, "It's reached the point where it's a piece of rhetoric rather than a real threat."