Bakhtiar was born in 1914 to Sardar Moazzam Bakhtiari, a chieftain of the eminent Bakhtiari tribe. He studied at a French school in Beirut (many Iranians were Francophiles at the time: e. g. Amir Abbas Hoveyda and General Hassan Pakravan) from 1928 to 1933, whereupon he was accepted to the renowned Saint-Cyr military academy. After returning to Iran, he graduated from Tehran's Military Academy. His cousin, Shapour Bakhtiar, and he went together to both Beirut and Paris for higher education.
Then he was made a first lieutenant and dispatched to Zahedan. Bakhtiar's first wife was Iran Khanom, the daughter of the powerful Bakhtiari chieftain Sardar-e Zafar. At that time, the Bakhtiaris were extremely influential; Muhammad Reza Shah's second wife, Soraya Esfandiary Bakhtiari, and the Shah's last prime minister, Shapour Bakhtiar, were both related to Teymour Bakhtiar.
Bakhtiar rose rapidly in Iran's military after the fall of Prime Minister Mohammad Mossadeq in 1953. A close associate of Prime Minister Fazlollah Zahedi, he was promoted to military governor of Tehran. One of his first major successes was the capture and trial of Mossadeq's minister of foreign affairs, Hossein Fatemi, who had actively fought the military government that succeeded Mossadegh's period in office.
Bakhtiar waged an extensive campaign against the communist Tudeh party; he arrested and had 24 Tudeh leaders summarily tried and executed, including Khalil Tahmasebi, the assassin of former Prime Minister Ali Razmara. For these accomplishments, he was appointed modern Iran's youngest three-star general in 1954. Bakhtiar was made head of the newly formed intelligence and security service SAVAK in February 1956. He ruthlessly crushed any opposition to the regime, including communists, Islamic fundamentalists, and any other anti-monarchists.
With the appointment of Ali Amini as prime minister in 1961, the Shah began to distrust Bakhtiar. Amini warned the Shah of Bakhtiar's contacts with John F. Kennedy, and Bakhtiar was dismissed in 1961. Ironically, Amini himself was a Kennedy supporter and was dismissed in 1962 partly because of the Shah's growing distrust of Kennedy.
Initially from his self chosen exile in Geneva, Bakhtiar retaliated by establishing contacts with Iranian dissidents in Europe, Iraq, and Lebanon, using the contacts he had built during his time at SAVAK.
He met not only Ayatollah Khomeini but also Reza Radmanesh, the General Secretary of the Tudeh Party, and Mahmud Panahian, the "War Minister" of autonomy-seeking state Azerbaijan People's Government, that had emerged briefly after the Soviet forces withdrew from Iran, following World War II. The Shah issued a warrant for Bakhtiar's arrest, but the general sought refuge in Iraq.
On 12 August 1970, during a hunting party, he was shot and killed by an Iranian Savak agent, feigning to be a sympathizer. As a cover for the plot, the assassin and a colleague had hijacked an Iranian passenger plane, forcing it to land in Baghdad. Disguised as dissidents of the Iranian government, the two assassins duped the Iraqi regime and gained access to Teymur Bakhtiar and his entourage. The truth behind these circumstances emerged only years later. Mohammad Reza Shah Pahlavi himself has been quoted as claiming the assassination a personal success. In an Interview with the acclaimed French author and biographer, Gerard de Villiers, the Shah publicly made a statement to this effect.
After being expelled from the ranks of Tudeh party, Mahmoud Panahian, in May 1970, came to Baghdad, Iraq, by the invitation of former Iraqi government officials. Upon arrival in Baghdad, Mahmoud Panahian had very fruitful discussions with a number of Iranian dissidents, as well as Iranian opposition leaders, namely Morad Aziz Razmavar, as well as Teymur Bakhtiar. Within the next few months, Mahmoud Panahian started recruiting people, organizing anti-Shah radio broadcasts and publishing his lifetime work started in Baku, Azerbaijan: “The Geographical Dictionary of Iranian Nationalities”.
Shortly before Bakhtiar’s assassination, Mahmoud Panahian, received a personal invitation from Bakhtiar to attend the same hunting party, but respectfully declined. Gen. Bahktiar’s would be assassin was a trusted person, living on the premises of Bakhtiar mansion in Baghdad and could have had the General assassinated at a much earlier time. However, the chances for escape were slim, as Teymur Bakhtiar was a VIP guest of the Iraqi government and was both watched and protected by Iraqi bodyguards.
Bakhtiar’s murder was investigated at the highest level. There was only one assassin. Once out hunting in the field, the assassin fired a shot at him from a pistol, hitting him in the shoulder, thus making Bakhtiar drop his rifle. Immediately, Bakhtiar’s Iraqi bodyguard attempted to shoot the assassin with an AK-47, but was shot in the forehead first. The general reached for his revolver with his left hand, but was shot 5 times in the torso and left hand by the assassin. Bakhtiar was brought to a hospital and underwent surgery, but died shortly thereafter from massive internal bleeding.
The assassin quickly left the scene, heading towards the Iranian border. He passed out just several kilometers before reaching the border crossing, due to the heat. He was captured by Iraqi border patrol and brought to Baghdad alive. The fate of this person remains unknown. It is also not known where he obtained his small arms training as well as the pistol used.