Determined to finish off Germany at any cost, Roosevelt, Stalin, and Churchill came together for the first time at the capital of Iran, and signed the Declaration of the Three Powers. Pronouncing themselves "friends in fact, in spirit, and in purpose," they came away from the conference feeling that perhaps the Grand Alliance could produce more of a long term peace than they had hoped. Churchill toasted to "Stalin the Great," Stalin called Churchill a "great friend," and Roosevelt voiced his optimism in saying that "We have proven here at Teheran that the varying ideals of our nations can come together in a harmonious whole, moving unitedly for the common good of ourselves and of the world..." Once again it appears that they may have been using elaborate, ceremonial gestures of unity to help achieve political goals.

The military decisions arrived upon decreed that their Yugoslavian allies ought to be aided, that they would try to bring Turkey into the war on their side, and that Operation OVERLORD would be launched in May 1944. The three had difficulty deciding this time frame, as Stalin desperately wanted this operation to occur, but Churchill repeatedly tried to delay it. He was much more hesitant to risk so many soldiers' lives, a value which was not as deeply founded in Soviet society, or at least from Stalin's viewpoint, especially as they weren't his soldiers. Thus, he accused Churchill of having no actual intention to go through with this Allied invasion. But Roosevelt kept things smooth by pushing for the date to remain in May. In return, Stalin promised to enter the war against Japan at some point. They managed to create a joint stategy for winning the war, which required close communication between them, and began to plan the political reconstruction of the post-war world.

Roosevelt's goal was to preserve the cooperation of the Grand Alliance, with the addition of China, once the war was over, and so he remained somwhat disengaged from the arguments regarding European frontiers. Churchill proposed that both the Polish and Soviet borders be shifted westward, but Stalin also remained noncommittal. Eventually he said that he would accept the Curzon Line as his border with Poland, but he wanted East Prussia in return. In dividing Germany, each of them recommended different ideas, but Roosevelt's was the closest to what was eventually agreed upon.

Stalin feared a future threat from Germany, and so advocated punitive, harsh reparations, but Churchill would not allow a mistake like the Treaty of Versailles to be repeated. He propounded disarmament of the Germans without preventing them from leading decent lives. Stalin kept Churchill on the defensive, and there was a good deal of tension between them. At dinner one night Stalin declared that some 50,000- 100,000 German soldiers ought to be "physically liquidated," and while Roosevelt joked, "How about 49,000," Churchill stormed in disgust out of the room. Stalin immediately followed and brought him back in, suddenly full of charm and warmth.

Churchill kept hoping to meet in private with Roosevelt, but he never did, as Roosevelt twice rejected this plan, and instead met alone and in secret with Stalin. The two Western allies had met prior to this conference on numerous occasions, and it appears that Roosevelt was trying to be very sensitive to Stalin's suspicious nature, and did not want to offend him in any way. Some scholars point out that Roosevelt attempted to use the same methods of negotiating at these wartime conferences that he used in domestic situations, which meant relying heavily upon personal connections, and that this had somewhat unsuccessful and far-reaching results. In any case, Roosevelt bartered with his Soviet ally, letting him know that he was in favor of keeping the eastern European governments "friendly" to the USSR, and promising him gains in the Far East. All Roosevelt really wanted was to guarantee Soviet participation in the United Nations, which he thought was a way to seek long-term peace.