The village dates back to ancient times, as archaeological remains dating as far back as the Second Iron Age have been discovered on site. In 1945, there were 2,250 people living in Lifta, 2,230 of which were Muslims and the remaining 20 were Christian. During the 1947–48 Civil War in Mandatory Palestine, Lifta was depopulated as part of the 1948 Palestinian exodus.

After war, Jewish families lived on site, although most of the Jewish community left in 1971. After that, some of the area was used as drug rehabilitation clinic and a high school. The last residents left Lifta in 2017 and since then the government declared the village an Israeli nature reserve.