BACKGROUND Health services are historically based on providers's and policy makers's understanding of population health status. This does not necessarily reflect the real needs of a population. Health needs assessment (HNA) should improve individual or population health and optimize the way that limited resources are utilized. OBJECTIVE To review health needs literature and to describe Iranian primary healthcare (PHC) achievements in developing a needs-driven health system. RESULTS The Iranian PHC system was established to meet healthcare needs identified through population health status surveys. Since 1984, the PHC system has become highly organized and efficient, resulting in a dramatic decrease in infant, maternal and neonatal mortality rates, population growth, increasing life span and a marked shift towards non-communicable diseases. Through an organized partnership of the general population, volunteers, health workers and health professionals, a needs-oriented healthcare system became central to health policy in Iran. Several information sources were utilized to establish need. Improving death certification was an immediate and important part of this process. CONCLUSIONS Improved knowledge about personal rights, community and environmental health policies, and involvement of the media led to an increased range and depth of needs. Moving towards quality improvement and a needs-driven healthcare system requires continuous needs assessment. Novel methods of HNA, such as postal and telephone surveys, group discussions, surrogates for need such as quality-of-life measurement (commonly used in developed countries) or other locally designed methods such as the basic development needs approach, may be relevant to the Iranian PHC network.