The first significant Jewish Diaspora was the result of the Babylonian Exile (q.v.) of 586 BC. After the Babylonians conquered the Kingdom of Judah, part of the Jewish population was deported into slavery. Although Cyrus the Great, the Persian conqueror of Babylonia, permitted the Jews to return to their homeland in 538 BC, part of the Jewish community voluntarily remained behind.

The largest, most significant, and culturally most creative Jewish Diaspora in early Jewish history flourished in Alexandria, where, in the 1st century BC, 40 percent of the population was Jewish. Around the 1st century AD, an estimated 5,000,000 Jews lived outside Palestine, about four-fifths of them within the Roman Empire, but they looked to Palestine as the centre of their religious and cultural life. Diaspora Jews thus far outnumbered the Jews in Palestine even before the destruction of Jerusalem in AD 70. Thereafter, the chief centres of Judaism shifted from country to country (e.g., Babylonia, Persia, Spain, France, Germany, Poland, Russia, and the United States), and Jewish communities gradually adopted distinctive languages, rituals, and cultures, some submerging themselves in non-Jewish environments more completely than others. While some lived in peace, others became victims of violent anti-Semitism.

Jews hold widely divergent views about the role of Diaspora Jewry and the desirability and significance of maintaining a national identity. While the vast majority of Orthodox Jews support the Zionist movement (the return of Jews to Israel), some Orthodox Jews go so far as to oppose the modern nation of Israel as a godless and secular state, defying God's will to send his Messiah at the time he has preordained.

According to the theory of shelilat ha-galut (“denial of the exile”), espoused by many Israelis, Jewish life and culture are doomed in the Diaspora because of assimilation and acculturation, and only those Jews who migrate to Israel have hope for continued existence as Jews. It should be noted that neither this position nor any other favourable to Israel holds that Israel is the fulfillment of the biblical prophecy regarding the coming of the messianic era.

Although Reform Jews still commonly maintain that the Diaspora in the United States and elsewhere is a valid expression of God's will, the Central Conference of American Rabbis in 1937 officially abrogated the Pittsburgh Platform of 1885, which declared that Jews should no longer look forward to a return to Israel. This new policy actively encouraged Jews to support the establishment of a Jewish homeland. On the other hand, the American Council for Judaism, founded in 1943 but now moribund, declared that Jews are Jews in a religious sense only and any support given to a Jewish homeland in Palestine would be an act of disloyalty to their countries of residence.

Support for a national Jewish state was notably greater after the wholesale annihilation of Jews during World War II. Of the estimated 14 million Jews in the world today, about 4 million reside in Israel, about 4.5 million in the United States, and about 2.2 million in Russia, Ukraine, and other republics formerly of the Soviet Union.