The adoption of innovative approaches in urban planning and design systems requires the groundwork and flexibility in the overarching principles and procedures governing spatial planning, such as the principles of the political economy of space. This alignment can herald transformations and the realization of structural and functional changes in the decision-making and policy-making system of urban development planning. This study seeks to elucidate the role of the political economy of space in realizing an interactive planning approach in the urban development planning of Tehran's metropolis. Utilizing a mixed-method research approach, combining quantitative and qualitative methods, along with targeted Delphi and survey methods using questionnaire tool, the research data were collected. The results obtained through Structural Equation Modeling (SEM) revealed that the political economy of space plays a positive and significant role in realizing the interactive planning approach in the urban development planning process of Tehran's metropolis. Indeed, the findings indicate that the role of the political economy of space in achieving the structural and functional transformations envisioned by the interactive planning approach for urban development planning in Tehran's metropolis is positive and significant. This study highlights the role of the political economy of space and its alignment with modernist transformations in fostering constructive and efficient changes in the decision-making and policy-making system of urban development plans.