Ein Rafa was founded in the 1940s when the Barhom family moved from the nearby village of Suba into the valley. It expanded after 1948 when several other families left Suba and settled there. Most of the residents of the village are descended from the Barhom family. In 2007, there was controversy when one home built without a permit was demolished in the village.
In a co-existence project in Ein Rafa, children and teachers from the local school meet with Jewish children for joint activities in which they share food and games and become more trusting of one another.