The El Hahar Corporation's sought to sell land for farming in the Kfar Etzion region so as to develop the region between Jerusalem and Hebron. Gush Etzion refers to a group of Jewish villages established from the 1920s south of Jerusalem on the northern part of Mount Hebron, and destroyed during the 1948 Arab–Israeli War: Kfar Etzion, Massu'ot, Ein Tzurim and Revadim. The first three were aligned with the religious orthodox, and Revadim was aligned with Hashomer Hatzair (Young guards). It also refers to the four Israeli settlements re-established following the 1967 Six-Day War, and those settlements that have expanded the area of the Etzion Bloc.

The first modern Jewish attempt to settle within the area known today as Gush Etzion took place in 1927 by a group of Yemenite Jews who founded an agricultural village called Migdal Eder, in reference to a biblical quotation . The location was purchased because it was roughly equidistant from Bethlehem and Hebron Hebron, and thus fell between the zones of influence of the local Arab clans. This early community did not flourish, mainly due to economic hardships and escalating tension with neighboring Arab communities. Two years later, the 1929 Palestine riots and recurring hostilities forced the group to flee. The inhabitants of Migdal Eder were saved by the villagers of the neighboring Arab village of Beit Umar but were not able to return to the land they left behind.

In 1932, Jewish businessman Shmuel Holtzmann provided backing for another attempt at settling the area, through a company named El HaHar ("To the Mountain"). The initial kibbutz was created in 1935 and named Kfar Etzion, in his honor ("Etzion" being a Hebraization of "Holtzmann"). The 1936–1939 Arab revolt made life intolerable for the residents, so they returned to Jerusalem in 1937.