The party was formed in 1979 during the term of the ninth Knesset, when Geula Cohen and Moshe Shamir broke away from Herut in response to the Camp David Treaty between Egypt and Israel, particularly the return of the Sinai peninsula to Egypt, and the eviction of its Israeli settlers.

[6] Tehiya was strongly affiliated with the extra-parliamentary movement of Gush Emunim,[6] and included prominent members of Israeli settlements in the West Bank and Gaza such as Hanan Porat (later to be a member of the Knesset for the National Religious Party and the National Union) and Elyakim Haetzni.

Despite their previous difference of opinion, they were included in Menachem Begin's coalition government alongside Likud, the National Religious Party, Agudat Israel, Tami and Telem.

[9] The party was reduced to three seats in the 1988 legislative election, and was again excluded from Shamir's national unity government.

[11] In the 1992 legislative election, the party failed to cross the electoral threshold, and subsequently disappeared, with Cohen joining Likud that year.