Former German chancellor Gerhard Schroeder was to hold talks with top officials in Tehran on Monday and Tuesday as he heads up a trade delegation seeking to enhance business links with Iran.
The visit comes ahead of the expected implementation of a nuclear deal with Iran that will open its economy to Western investment after years of sanctions on its banks and key industries.
Schroeder arrived in Tehran on Sunday, a German embassy official said, and was on Monday to meet former president Akbar Hashemi Rafsanjani and Abbas Ahmad Akhoundi, Iran's transport minister.
On Tuesday he will meet President Hassan Rouhani and Oil Minister Bijan Zanganeh, the official added.
Schroeder is the honorary chairman of NUMOV, the Berlin-based German Near and Middle East Association, which works to boost trade.
Germany was the first member of the P5+1 countries (Britain, China, France, Russia and the United States plus Germany) to send a major trade delegation to Tehran after the nuclear deal was struck on July 14 last year.
That trip was led by Sigmar Gabriel, Germany's economy minister and Chancellor Angela Merkel's deputy.
Iran has said it needs tens of billions of dollars of investment and Western technology to revive projects in its oil, gas and petrochemical industries, which have suffered under sanctions.
The Islamic republic's 78 million population and educated workforce has long been seen as untapped, and its energy sector is considered ripe for deals.
With the fourth-largest oil reserves and the second in gas, Iran has the biggest combined energy deposits in the world.