BACKGROUND AND OBJECTIVES: The main objective of this paper is to propose a performance measurement framework for Iranian municipalities as a public institution. METHODS: By selecting Karaj Municipality and referring to Balanced Score-Card Methodology (BSC), an attempt has been made to provide a framework that can be used in public institutions as an efficient tool for measuring performance. The research used analytical methods and stand-alone questionnaire survey techniques, a case study approach by cross-sectional method. The research environment was the central municipality of Karaj and the relevant deputies. Content validity was used to determine the validity of the questionnaire. The reliability of the questionnaire was determined based on Cronbach’ s alpha. Also, the Balanced Score-Card framework is integrated with an Analytic Hierarchy Process (AHP). FINDINGS: The results show that through the citizenship viewpoint, the satisfaction level of personal investors and makers is almost 7 times more important than citizens’ satisfaction. The Municipality of Karaj pays more attention to the interests of the private sector than the public interests which comes from the municipality money making target. The improved implemented projects index was, through the internal processes of business, about 3 times more important than the number of new projects index. It seems more logical to focus on the process improvement plan and project management improvement. Completion of the current projects can increase the added value to Karaj municipality. Also proper performance of Information Technology (IT) unit shows the growing importance of e-government to improve the performance of municipalities and process improvement plan. CONCLUSION: Finally, it seems a continuous process of such framework has the ability to bring together all key internal and external shareholders and rulemakings can be shaped during time and this process can be accepted by Iran’ s municipal management with methodologies that compare relative importance in performance criteria.