An enclave within Jerusalem's municipal boundaries, near the neighborhoods Arnona and Talpiot, and overlooking Bethlehem and Rachel's Tomb (for which the kibbutz is named), it falls under the jurisdiction of Mateh Yehuda Regional Council.

[1] According to archaeologists, Ramat Rachel "replaced Jerusalem as the economic and political hub of the southern highlands" in ancient times.

Their goal was to settle in Jerusalem and earn their livelihood from manual labor, working in such trades as stonecutting, housing construction and haulage.

[3] After living in a temporary camp in Jerusalem, a group of ten pioneers settled on a stony plot of land on an 803-metre high hill south of the city.

In a series of digs in 1959–1962, Yohanan Aharoni tentatively identified it as the biblical Beit Hakerem (Jeremiah 6:1), one of the places from which flaming warning signals were sent to Jerusalem at the end of the First Temple period.

[9] Yigael Yadin dated the palace excavated by Aharoni to the reign of Athaliah and identified it as the "House of Baal" recorded in 2 Kings 11:18.

[14] A large number of arrowhead finds from the site suggest the presence of a Babylonian garrison during the sixth century BCE, consistent with evidence of its function as a major administrative center during this period.