ATS has its historical roots in the work of its founder, Dr. Albert B. Simpson, who pastored in New York City and founded two organizations, one a deeper-life fellowship and the other a missionary-sending agency, that would later merge and become a missionary denomination.

Dr. Simpson organized a training school for missionaries in New York City in 1882. The school moved to the village of Nyack, New York, in 1897 and in time became Nyack College. Before ATS became a seminary, it was first known as the Jaffray School of Missions (1960) to better train prospective missions candidates in the interdisciplinary studies of theology and social sciences. It was then redesigned in 1974 to include the preparation of students for North American ministries, and became the Alliance School of Theology and Missions.

In 1979, the Master of Divinity program was initiated, and Alliance School of Theology and Missions became Alliance Theological Seminary. Increased course offerings and additional faculty have enhanced the seminary's commitment to the worldwide evangelistic task of the church.