The middle‐upper Jurassic successions (Sargelu, Najmah, and Gotnia formations) of the NW sector of the Zagros Mountain belt are studied to generate a sequence stratigraphic model that helps to understand the Jurassic tectono‐depositional processes and palaeogeographic reconstructions of the northeastern passive margin of the Arabian Plate. The major geological structures observed in northwestern Iran indicate the predominance of an extensional deformation during the Toarcian to Aalenian owing to the eastern Mediterranean rifting. This extensional regime reached its maximum from the Early to Middle Jurassic, causing the fragmentation/drowning of the long‐lived Triassic to Early Jurassic carbonate platform and the development of the Hawraman intrashelf basin (HIB). Associated changes in marine current dynamics, trophic conditions, and degree of substrate oxygenation led to the bloom of oligotypical biota (Bositra limestones) creating unfavourable conditions for the development of other benthic communities (Sargelu Formation). Later, from the Callovian to Oxfordian, changes in carbonate production types (switch from the Bositra filament facies to the stromatolitic‐thrombolitic boundstones) remarkably decreased the dip angle of the depositional profile (Najmah Formation). A second‐order tectono‐eustatic cycle (a major long‐term transgressive/regressive [T/R] cycle) including six minor short‐term T/R facies cycles (TR1–TR6) is identified in the study area. The development of the T/R facies cycles during the Middle Jurassic (TR1–TR3; give‐up sequences; Sargelu Formation) as a result of combined global eustatic transgression and linear subsidence resulted in drowning and backstepping of the platform. In contrast, the short‐term cycles that developed in the upper Jurassic (TR4–TR6; keep‐up sequences; Najmah and Gotnia formations), following a sea‐level fall, resulted in progressive shallowing of the carbonate platform. This study suggests that extensional deformation of the area reached its peak in the transition of the Early to Middle Jurassic, leading to the creation of HIB, but either decreased or played a subordinate role to eustatic sea‐level variations during the deposition of the TR1–TR3 facies cycles (Bajocian‐Callovian). Changes in tectonic regime from an extensional deformation (Early Jurassic) to cooling subsidence (Middle Jurassic), accompanied by a long‐term transgressive sea‐level trend during the Middle Jurassic, were important factors in the development of anoxic trough environments with the deposition of organic‐rich intervals, represented by the TR1–TR3 facies cycles. Tectonic instability (tectonic uplift plus considerable differential subsidence due to the reactivation of faults) in the eastern margin of the Arabian platform during the Late Jurassic led to the development of the TR4–TR6 facies cycles.