BackgroundInformal payments for health care, which are common in many countries, can have negative effects on health care access, equity and health status as they lead people to forgo or delay seeking care, or to sell assets to pay for care. Many countries are putting reforms in place with the aim of reducing informal payments. In order to be successful, such policies should be informed by the underlying causes of such payments. This study attempts to explore why, how, and in what ways informal payments occur. MethodsWe conducted face-to-face interviews with a purposeful sample of 45 participants, including patients, healthcare providers and officials, in Kerman province in Iran, in 2010. The research participants were asked about the nature of informal payments, the reasons behind both asking and making those payments. We analysed the data using content analysis. ResultsWe found that people make informal payments for several reasons, namely cultural, quality-related and legal. Providers ask for informal payments because of tariffs, structural and moral reasons, and to demonstrate their competence. Informal payments were found to be more prevalent for complex procedures and are usually asked for directly. ConclusionInformal payments are present in Iran’s health system as in other countries. What makes Iran’s condition slightly different from other countries is the peculiarity of reasons behind asking informal payments and the disadvantages associated with these kinds of payments. Iran could overcome this dilemma by precise investigation of the reasons to inform appropriate policy formulation. Some policies such as raising salaries, justifying the tariffs and cost-sharing, defining a benefits package of services, and improving accountability and transparency in the health system could be taken by the government to alleviate the problem.