Prior to the 1979 Islamic revolution, she made headlines when she became the country's first female judge. But she was stripped of her post when the new ruling clerics decided that women were unsuitable for such responsibilities.
Rather than retire to a life of obscurity, Ebadi continued to lecture in law at Tehran university and emerged as a vocal activist and lawyer dedicted to women's and children's rights.
She was a major driving force between the reform of Iran's family laws, notably on divorce and inheritance -- and also against a system where the "blood money" -- compensation for an injury -- for women is half that for a man.
Ebadi also emerged as something of an unofficial spokesperson for Iranian women, who demonstrated their political clout in 1997 by rallying around the mild-mannered reformist cleric Mohammad Khatami and electing him president.
But it was involvement in investigating one of Islamic Iran's most controversial cases -- the 1999 serial murders of writers, intellectuals and dissidents -- that put her on a collision course with Iran's hardliners.
She served as lawyer for Dariush and Parvaneh Foruhar, a couple who were among several dissidents who died in a spate of grisly murders that were eventually pinned on "rogue" agents from Iran's intelligence ministry.
In June 2000, she was arrested along with another reformist lawyer, for allegedly distributing a taped confession of a hardline vigilante militia member involved in anti-reformist violence. She was held in jail for three weeks, and then recieved a suspended prison sentence of five years and was barred from practising law in a closed-door trial.
Her work has won her accolades from Human Rights Watch, Amnesty International, and in 2001 she was awarded the human rights Rafto prize. She is married and has two daughters, aged 20 and 23.
The profile released by the Nobel Committee following Friday's announcement said, "Both in her research and as an activist, she is known for promoting peaceful, democratic solutions to serious problems in society. She takes an active part in the public debate and is well-known and admired by the general public in her country for her defence in court of victims of the conservative faction's attack on freedom of speech and political freedom.
"Ebadi represents Reformed Islam, and argues for a new interpretation of Islamic law which is in harmony with vital human rights such as democracy, equality before the law, religious freedom and freedom of speech.
"As for religious freedom, it should be noted that Ebadi also includes the rights of members of the Bahai community, which has had problems in Iran ever since its foundation.
"Ebadi is an activist for refugee rights, as well as those of women and children. She is the founder and leader of the Association for Support of Children's Rights in Iran. Ebadi has written a number of academic books and articles focused on human rights."
"With Islam as her starting point, Ebadi campaigns for peaceful solutions to social problems, and promotes new thinking on Islamic terms. She has displayed great personal courage as a lawyer defending individuals and groups who have fallen victim to a powerful political and legal system that is legitimized through an inhumane interpretation of Islam.
"Ebadi has shown her willingness and ability to cooperate with representatives of secular as well as religious views."