With the process of globalization, foreign direct investment (FDI) serves as a crucial determinant of economic development in each country and significantly influences international trade. On the other hand, the terms of trade represent one of the key macroeconomic variables, indicating the extent of gains or losses resulting from fluctuations in international trade levels. This study aims to investigate the impact of foreign direct investment on the terms of trade across the agricultural, industrial, mining, services, and oil sectors using the panel data autoregressive method over the period from 1978 to 2022. The findings reveal that, in the short term, both the international trade index and foreign direct investment exert a negative and significant effect, whereas oil revenues exhibit a positive and significant impact on the terms of trade. Furthermore, within the industrial, mining, services, and oil sectors, the gross domestic product (GDP) variable exerts a statistically significant influence, while foreign direct investment maintains a negative and significant effect on the terms of trade in the long term. These results suggest that in these sectors, the inflow of foreign direct investment contributes to infrastructure development and facilitates technological transfer to Iran, thereby enhancing export volumes relative to imports. Moreover, the long-term estimation results indicate that the error correction coefficient across all four economic sectors of Iran falls within the range of zero to one. This finding implies that the long-term equilibrium is convergent, ensuring that any deviations from equilibrium will ultimately correct over time.