The most common explanation for the neighborhood's name is its view of the biblical River Arnon, now Wadi Mujib in Jordan, running from the Moab Hills to the Dead Sea.

According to The Jerusalem Post, Arnona takes its name from the baby girl of Ben Zion and Yehudit Luria, one of the neighborhood's first residents.

The site served for the collection and storage of taxes in the form of agricultural produce, and was first used during the reign of two biblical kings of Judah, Hezekiah and Manasseh (together they ruled from c. 715–643).

According to the Israel Antiquities Authority, the archaeological discoveries identify it as a highly important site in the history of the Kingdom of Judah in its final days and subsequent return to Zion.

On February 23, 2018, the Trump administration announced that the United States Embassy to Israel would relocate to the Arnona premises of the Consulate General by May 14 to coincide with the 70th anniversary of the Israeli Declaration of Independence.