It was formed in the late 1980s by lead vocalist Joanne Hogg and multi-instrumentalists David Fitzgerald and Dave Bainbridge.

When Iona released their first self-titled album in 1990, drummer Terl Bryant, bassist Nick Beggs (formerly the bassist of Kajagoogoo), Fiona Davidson on Celtic harp, Peter Whitfield on strings, Troy Donockley on Uilleann pipes, and percussionist Frank van Essen had joined the band.

Journey into the Morn was released in 1995, a more accessible and rock-oriented album loosely based on the hymn "Be Thou My Vision".

Two live albums followed in the late 1990s: the double-disc Heaven's Bright Sun and Woven Cord, which was performed with the All Souls Orchestra.

[2] Between these two albums Teri Bryant departed, and Frank van Essen returned, playing drums as well as violin.

On 11 December 2016, the band announced on its Facebook page that it was suspending recording and touring as a group, citing other commitments.

In March 2024, Bainbridge announced that he would join with Sally Minnear to perform Iona music as a duo on a UK tour in July.