Imaging and resolving the lateral continuity of 3-D crustal structures enhance our ability to interpret seismicity and to understand how orogens are created. We apply a Bayesian, hierarchical inversion approach based on a transdimensional trees-structured wavelet parameterization to recover phase velocity maps at 2-40 s periods. We then invert phase velocity dispersion to constrain a 3-D shear velocity model of the crust beneath south-central Iran. Together with accurate earthquake centroid depths and focal mechanisms, the pattern of 3-D velocity variations supports recent suggestions that most large earthquakes in the Zagros occur within the lower sedimentary cover or close to the sediment-basement interface. Furthermore, we find evidence for Arabian basement underthrusting beneath central Iran, although only in one location does it appear to generate earthquakes. Our new 3-D tomographic model clarifies and throws new light on the crustal structure of the SE Zagros and its relation to seismicity and active faulting.