The land on which Neve Ilan is located was purchased by the Jewish National Fund from an Arab effendi from Abu Ghosh at the urging of David Ben-Gurion in order to establish a "Kibbutz Army Post" to defend the Jerusalem road.

After a short spell working in Hadera they moved to Neve Ilan in October 1946; the settlement was initially a fortified post with bunkers and ammunition stores, with the residents living in tents, and later in two cabins.

On May 8, Palmach fighters, part of “Operation Macabee”, gathered at Neve Ilan in preparation for the attack on the village of Saris, and the western approach to Bab al-Wad.

[2] During the battles for the road to Jerusalem, a generator and perimeter lighting were set up at the kibbutz, in order to proclaim that a Jewish settlement was situated there.

At the start of the 1948 Arab–Israeli War in late May 1948, the Jordanian Legion, based in Yalo, shelled Neve Ilan, causing heavy damage.