Abstarct: Advancements in Telecommunications and Information Technology have changed the way financial transactions are done in the banking industry. Banks today are downsizing their branch operations and investing heavily in alternative electronic delivery channels. In this context, the development of the Internet and the World Wide Web (WWW) has provided to banking industry an avenue in Internet Banking. In some countries Internet Banking is available 24 hours a day, seven days a week and is accessible from almost anywhere so long as there is an Internet connection. However, the uptake of this new innovation in the delivery of financial services has not been very encouraging due to the fears associated with the open nature of the Internet and its vulnerability to security breaches and fraud via hackers. The motivation for this study is the belief that the poor response to Internet banking in Iran springs from an inadequate Regulatory frxamework for customer protection and the lack of initiatives on the part of the banks in promoting this new delivery channel. In addition to the two key factors mentioned above, this study also tries to examine the impact of other factors such as the customers’ attitude towards risk, trust in the service provider, customers’ perceived value of Internet banking, and the interface design of the bank web site on Internet bank adoption. Results showed that the scope and quality of the innovations in services provided by banks and financial institutions in their internet-banking systems ought to be reinforced if they aim to persuade their customers to apply such new services more frequently. Establishment of sufficient ( as well as efficient) regulations for internet-banking can also prompt the traditional bank customers to move up to this higher technology. With regard to the significant role of the value added in facilitating the process of accepting a new technology, one may claim that exposing the customers to the advantages of internet-banking has a considerable positive affect on expansion of using this innovative banking system.