B'nai B'rith was founded in Aaron Sinsheimer's café on New York's Lower East Side on October 13, 1843, by a group of 12 recent German Jewish immigrants led by Henry Jones. The new organization represented an attempt to organize Jews on the basis of their ethnicity, not their religion, and to confront what Isaac Rosenbourg, one of the founders, called "the deplorable condition of Jews in this, our newly adopted country." True to their German heritage, the founders originally named the organization Bundes Bruder (Sons of the Covenant) to reflect their goal of a fraternal order that could provide comfort to the entire spectrum of Jewish Americans. Although early meetings were conducted in German, after a short time English emerged as the language of choice and the name was changed to B'nai B'rith. In the late 20th century, the translation was changed to the more contemporary and inclusive Children of the Covenant. The organization's activities during the 19th and 20th centuries were dominated by mutual aid, social service, and philanthropy. In keeping with their concerns for protecting their families, the first concrete action of the organization was the establishment of an insurance policy awarding the widow of a deceased members $30 toward funeral expenses and a stipend of one dollar a week for the rest of her life. To aid her children, each child would also receive a stipend and, for a male child, the assurance he would be taught a trade.

In 1875, a lodge was established in Toronto, followed soon after by another in Montreal and, in 1882, by a lodge in Berlin. This is believed to be the first instance of a Jewish organization founded on American soil being carried back to the lands from which its founders had migrated. Membership outside the U.S. grew rapidly. Soon, lodges were formed in Cairo (1887) and in Jerusalem (1888 – nine years before Herzl convened the First Zionist Congress in Basel); the latter became the first public organization to hold all of its meetings in Hebrew.