The Jewish communal settlement (kvutza) was founded in 1910, making it the earliest Labor Zionist farming commune in the Land of Israel.

Its status as "the mother of all kibbutzim" is sometimes contested based on a later distinction made between the smaller kvutza, applying to Degania in its beginnings, and the larger kibbutz.

In June 1912, the group moved from the mud huts and wooden shack of Umm Juni to the new stone-built compound at its permanent location.

[11] That is at the place where the Jordan River emerges from the Sea of Galilee and therefore had the Arabic name Bab al-Tumm, "Gate of the Mouth".

[11][12] The poet Rachel Bluwstein, the "prophet of labor" A. D. Gordon, and paramilitary commander and leading Zionist Joseph Trumpeldor all worked at Degania Alef.

[14][verification needed] The second child to be born in Degania Alef was the prominent Israeli general and politician Moshe Dayan.

[18] According to a 1949 book by the Jewish National Fund, the village was destroyed following attacks on the neighboring kibbutzim of Sha'ar HaGolan and Masada.

In 1981, Kvutza Degania Alef was awarded the Israel Prize, for its special contribution to society and the State in social pioneering.