The institution of mahr in Iran has increasingly become a focal point of legal and social debate, shaped by broader socio economic changes. While the legal system seeks to impose a formal and predictable order, mahr simultaneously unfolds within the lived realities of everyday life, where it operates as a tool for risk management, post divorce economic security, and a symbolic resource for bargaining and influence in informal arenas. This dual positioning generates the study’s central question: how the legal structure interacts with the strategic actions of social actors, and what dynamics emerge from this interaction within the institution of mahr. The study aims to present a sociological analysis of mahr as a dynamic institution grounded in the concept of “living law,” examined through a structure–agency lens. Methodologically, it adopts a qualitative approach based on thought experiments within an interpretive critical framework, drawing on Pierre Bourdieu’s theoretical concepts. In this perspective, both structure (the legislator’s intent) and agency (spouses’ practices) are shaped by habitus—internalized dispositions and learned patterns of action. Behaviors related to mahr, from full legal enforcement to its use as leverage or pressure, thus manifest within a field organized by these habitus driven logics. The findings indicate that mahr in Iran is undergoing a transitional phase in which the legal structure alone cannot regulate its evolving functions. The structure–agency analysis shows that the dynamics of social life exert greater influence than the rigid norms of formal law, continually reshaping the meaning and function of mahr. The article’s main contribution lies in developing a conceptual framework that connects the notion of living law to this localized legal–social institution, offering insights for scholars and policymakers seeking to understand the persistent gap between “law on the books” and “law in action.”