The Interfaith Assembly grew out of a series of conversations in the mid-1980's among concerned New Yorkers of various faiths and backgrounds who believed that our common values called us to challenge all people of good will to address the growing crisis of homelessness on moral and spiritual grounds. Provided with office space by the Cathedral of St. John Divine, the group began to organize activities designed to draw attention to the issue of homelessness and call for public action.

In 1985, the first Interfaith Convocation and Overnight City Budget Vigil was held to call for action to address homelessness and the housing crisis in the New York City Budget. This event became an annual focus for the group and in 1989, the overnight vigil became a 200-day encampment in City Hall Park. A "village" of homeless men and women calling itself "Homeward Bound Community Services" but dubbed by the media as "Kochville" (named after then Mayor Ed Koch) became a center of public attention and altered the way the public viewed homeless people. The group established its own governance and provided referral services to homeless men and women in the area. (A book by John Jiler, entitled Sleeping with the Mayor chronicles this story). .

The power of the personal testimonies of those who led the encampment was so compelling that the Interfaith Assembly invited some of the leaders to share their stories publicly as part of the effort to encourage citizen action to address the issue. In partnership with New York Catholic Charities, the Assembly developed the Education Outreach Program (EOP) to assist homeless men and women to be able to articulate their experience of homelessness and at the same time begin to recover from the trauma associated with their homelessness. The EOP is now in its 21st year and along with this program, the Assembly has developed a series of other means to assist those who have been homeless to life fuller lives and also assist in the establishment of public policies on behalf of those most in need.