<p>Blockchain technology, renowned for its transparency, security, and decentralization capabilities, offers transformative prospects for enhancing environmental sustainability in agriculture. This paper explores the adoption of blockchain within Iranian agricultural supply chains, focusing on its potential to foster sustainable agricultural practices. By enabling improved traceability and transparency, blockchain technology aids in the efficient monitoring of environmental factors such as water usage, soil health, and biomass management. The study employs a qualitative interpretive structural modelling approach to analyze the advantages of blockchain, including its role in reducing fraud, optimizing logistics, and minimizing waste, thus contributing to a more sustainable agro-environment. Furthermore, the paper addresses significant challenges such as stakeholder awareness, regulatory uncertainties, and the complexities of technology implementation. It proposes strategic interventions to mitigate these barriers and emphasizes the importance of collaborative efforts among supply chain participants to align business strategies with environmental sustainability goals. Among them, “weakness in laws and policies” was positioned at Level II of the proposed model, meaning it influenced other components in Level I, such as “management weakness,” “weakness or lack of infrastructure,” “economic problems and obstacles,” and “human-related problems and obstacles”. By providing a strategic framework for blockchain integration, this research contributes to the discourse on innovative processes in agriculture, aiming to enhance the balance between agricultural productivity and environmental conservation in Iran. The findings offer valuable insights for stakeholders contemplating blockchain adoption in pursuing sustainable agricultural development.</p>