Modern Israeli music is heavily influenced by its constituents, including Jewish immigrants (see Jewish music) from more than 120 countries around the world, who have brought their own musical traditions, making Israel a global melting pot.

From the earliest days of Zionist settlement, Jewish immigrants wrote popular folk music. At first, songs were based on borrowed melodies from German, Russian, or traditional Jewish folk music with new lyrics written in Hebrew. Starting in the early 1920's, however, Jewish settlers made a conscious effort to create a new Hebrew style of music, a style that would tie them to their earliest Hebrew origins and that would differentiate them from the style of the Jewish diaspora of Eastern Europe, which they viewed as weak. This new style borrowed elements from Arabic and, to a lesser extent, traditional Yemenite and eastern Jewish styles: the songs were often homophonic (that is, without clear harmonic character), modal, and limited in range. Examples of this emerging style include "Shadmati" by Yedidia Admon, and "Shibbolet Basadeh" by Matityahu Shelem. "The huge change in our lives demands new modes of expression," wrote composer and music critic Menashe Ravina in 1943. "... and, just as in our language we returned to our historical past, so has our ear turned to the music of the east ... as an expression of our innermost feelings."

Parallel to the emergence of this new style, many composers continued to write songs in the more familiar styles they brought from the Eastern European diaspora - songs with a distinctly Russian or Slavic character. And some composers succeeded in merging the two trends; notable among these were Mordecai Zeira ("Hayu Leylot ??? ", "Shney Shoshanim "), David Zehavi ("Hekhalil ") and Moshe Wilensky ("Hayu Zmanim").

The youth, labor and kibbutz movements played a major role in musical development before and after the establishment of Israeli statehood in 1948, and in the popularization of many of these songs. The Zionist establishment saw music as a way of establishing a new national identity, and, on a purely pragmatic level, of teaching Hebrew to new immigrants. The national labor organization, the Histadrut, set up a music publishing house that disseminated songbooks and encouraged public sing-alongs. This tradition of public sing-alongs continues to the present day, and is a characteristic of modern Israeli culture.

From the 1930s to the 50s, Yemenite Jews made up some of the musical stars. Bracha Zefira, Shoshana Damari and Esther Gamlieli were some of the most famous singers, due to Yemen's long history as a center for the preservation of Jewish traditions. Yemenite Jews remain popular, and performers like Ofra Haza, Noa, Gali Atari and Dana International have some international fame.

The first few years after Israel's creation saw an attempt at forging a unique Israeli cultural identity by melding the constituent cultures. This failed, however, as the disparate musical traditions did not blend well together. After 1948, explicit policy encouraged Hebrew language songs instead of Ladino or Yiddish ones. Hebrew is thus the language of choice for most Israeli musicians, though many also include an occasional song or album in Yiddish or Ladino.

Sephardic Jews have also played a major part in Israeli popular song. Sephardic musicians include Yehoram Gaon, Emil Zrihan, Jo Amar, Haim Louk and Ruth Yaakov.

More recent singer-songwriter traditions have produced an Israeli tradition, with musicians like Chava Alberstein modelling themselves after Americans Joan Baez and Pete Seeger. The 1980s and 90s saw a wave of roots revival and fusion musicians arrise, fusing Iranian, Turkish, Greek and Moroccan traditions with rock and roll, pop music and jazz. Habrera Hativeet is perhaps the most influential of these groups; they began performing in the 70s and have included influences ranging from American blues to African folk music and Hassidic songs. Even more recently, hip hop has made some inroads into mainstream Israeli audiences. The upsurge in American aliyah (immigration) is starting to bring popular American rock artists like Bradley Fish into the local Israeli mix.