Jaipal Singh Munda merged the Jharkhand Party with the Indian National Congress in 1963 and became a minister in Vinodanand Jha's government in Bihar.

Jharkhand Mukti Morcha was founded by Soren, Binod Bihari Mahato and Marxist Co-ordination Committee leader A. K. Roy.

The party was officially created on the birthday of Birsa Munda, a 19th-century tribal warrior from Jharkhand, who fought against British rule in the region.

In its early years, the JMM under Soren's leadership brought industrial and mining workers who were mainly non-tribals belonging to the Dalit and backward communities such as Surdis, Doms, Dusadh, Kurmi, Koiri, Gowala, and Teli into its fold.

Irked by Soren's association with the Indian National Congress, a few younger members of the JMM banded together in Jamshedpur and set up the All Jharkhand Students Union (AJSU).

Due to Munda, Shibu Soren, Suraj Mandal, Simon Marandi, Shailendra Mahato, and AJSU leaders like Surya Singh Besra and Prabhakar Tirkey briefly shared a political platform, but the JMM pulled out of JCC as it felt that "the collective leadership was a farce".