The Sanandaj–Sirjan Zone (SSZ) of western Iran is characterized by numerous granitoids of mainly calc-alkaline affinities. Several leucogranite and monzonite bodies crop out in the eastern Sanandaj. Whole-rock Rb–Sr isochrons demonstrate that the Mobarak Abad monzonite (MAM) formed in two phases at 185 and 131 Ma. Low 87Sr/86Sr(i) (i represents initial) and high 143Nd/144Nd(i) ratios, resulting in positive εt Nd, imply that the source magma originated from a depleted mantle; large ion lithophile element (LILE) and light rare earth element (LREE) enrichments imply that slab fluid was involved in the evolution of the parent magma. Geochemical characteristics of the MAM rocks show an affinity with I- and A-type granites, and the positive values of εt Nd (+2 to +6), confirm that the MAM represents juvenile granite. Therefore, the MAM rocks are different from Himalayan, Hercynian, and Caledonian granites. Based on the geology of granitic host rocks that form the protoliths of metamorphic rocks, it is likely that the mafic part of the MAM formed in an island arc setting on Neo-Tethyan oceanic crust during Early to Middle Jurassic time. Subsequent collision of the island arc with the western part of the SSZ occurred in the Late Jurassic to Early Cretaceous. Metamorphism, accompanied by partial melting, occurred during collision. Finally, leucogranite magmas of the young Mobarak Abad dikes and the Suffi Abad body were generated in this collision zone. This new model suggests a Late Jurassic–Early Cretaceous arc–continental collision before final closing of the Neo-Tethys