Britain drastically changed its political and military strategies on the Persian Gulf at the beginning of the 19th century. The country seized some new areas to enhance its influence in the Persian Gulf. Basaeidou in Qeshm Island was among the regions that the country occupied for more than a century. In 1933, an Iranian ship entered Basaeidou and lowered the flag of Britain. Later this incident prompted Britain to leave the region. Taking a descriptive-analytical approach and using documentary method, this study aimed to see the position of Basaeidou regarding the relations between Iran and Britain and what issues make Britain to leave there. The results showed that Britain took advantage of the conflicts between Iran and Soviet Union in the North of Iran during the Qajar era to occupy Basaeidou. Lowering the flag of England in Basaeidou by the Iranian Navy in the first Pahlavi period imposed a crisis in their relations. The issue created other challenges for Britain in the region. Moreover, the sheikhs advocating England doubted on the power of the country to guarantee their security. They also doubted the country’s responsibility to the people under its protection. England’s delegates in the Persian Gulf attempted to solve the problems in all possible ways. The controversy between British Embassy in Tehran and the Crown rule in India made it impossible for London unable to take a united and integrated policy about the issues. It, therefore, became one of the issues that made Britain withdraw from Basaeidou.