Written records of brewing in Palestine start with the British Mandate (1920-1948), and not in the Arab towns. The first industrial brewery, Max Brau, was opened in Acre in 1926 by the brothers Aharon-Zvi and Mordechai Rosenberg, who had come from Poland two years earlier, and it closed after three years. In 1934-35 the Palestine Brewery (Nesher) followed in Rishon LeZion, set up by James Armand de Rothschild with Gaston Dreyfus; in 1940 it was commissioned to supply the Australian troops stationed in Palestine, and by 1942 it had to enlarge its plant. A 2024 study finds that British reluctance to back local firms held brewing back in the first decade of the Mandate and that from the late 1930s Nesher gradually replaced imported beer. Both sites are in today's Israel; the first brewery in the Palestinian territories opened only in 1994.

That brewery was a child of the Oslo Accords. Nadim Khoury had made beer in a Boston dormitory from 1982 and later studied brewing at UC Davis. In 1994 he and his brother David came home to their father Canaan's village of Taybeh near Ramallah and built Taybeh Brewing Co. with family money and the blessing of Yasser Arafat, who saw in it a way to loosen Palestine's dependence on alcohol imported from Israel. Its first beer, Taybeh Golden, was brewed under the German purity law (Wikipedia dates the first brew to 1995). Before 2000 about 70% of the sales went to Israel, helped by a kosher certificate; in 1997 Taybeh became the first Palestinian company to franchise abroad, with beer brewed in Germany. The Second Intifada hit it hard: checkpoints and the West Bank barrier cut the brewery off from the port of Ashdod, revenue fell by over 90% by 2002 and all 12 employees were laid off.

The recovery rested on festivals and new beers. The Taybeh Oktoberfest began in 2005, and was called off in 2014 because of the war in Gaza. Nadim's daughter Madees trained as a brewer from 2007; Amber came in 2007 and a non-alcoholic brew in 2008, for Muslim customers, since Hamas, which took Gaza in 2007, banned the sale of alcohol there. A winery opened in 2012; Nadim's son Canaan, a Harvard graduate, joined in 2013 and moved the brewery to solar power in 2016, and the IPA and the first US sales came in 2017. Competitors arrived in 2015: Birzeit Brewery, founded in 2013 by the Sayej brothers, began selling Shepherds Beer in July 2015 after a Palestinian Authority office had rejected its shepherd label as a picture of Jesus, and in Beit Sahour the carpenter Rafat Houary started the home-based Wise Men Choice. Wikipedia adds Nativity Beer there in 2022.

Since October 2023 the war in Gaza and the crackdown in the West Bank have hit hard. In 2024 Taybeh, with about 15 staff, sold half of its beer in the West Bank and 35% in Israel and exported to 17 countries through the Israeli ports of Ashdod and Haifa; by December 2025 sales were down about 70%. Settlers burned cars in Taybeh in the night to 28 July 2025, and the Ein Samiya spring that feeds the brewery has fallen under settler control, Al Jazeera reported. To get round the export barrier, Taybeh made Sun & Stone with the Glasgow brewer Brewgooder in September 2025: 180,000 cans for 1,600 Co-op stores. On 9 August 2026 Israel's army closed Taybeh to non-residents, citing settler attacks; Madees Khoury puts the brewery's revenue 80% below its level before October 2023.