The Story of the Church

Foundations — Section 1: Week 3

Covenant Theology: What is it?

“So then, brothers, stand firm and hold to the traditions that you were taught by us, either by our spoken word or by our letter” (2 Thes 2:15 ESV).

When was the church born? At Pentecost? With Abraham? With Adam and Eve? Two major theological traditions shape this debate: Covenantal theology and Dispensational theology. Each offers a distinct answer to when — and even what — the church is. In the interest of transparency, I should state my position. I hold to a dispensational understanding of the church, and I believe the evidence supports it. What follows is my attempt to lay that case out fairly and clearly.

Before we examine the evidence, it helps to consider where you're standing — and where your understanding comes from. Most Christians already identify with a denominational tradition, and those traditions shape how we read Scripture more than we often realise.

There are six broad traditions that most believers would recognise. Some within each tradition will diverge, but our identification here is necessarily broad. Roman Catholic, Eastern Orthodox, Lutheran, Reformed/Presbyterian, Baptist, Pentecostal/Charismatic.

It is probable that if you belong to a Reformed/Presbyterian tradition, your church doctrine is most likely based on covenant theology. Baptist traditions can vary; note their theological and doctrinal statements, usually found on their official websites. Catholic and Eastern Orthodox traditions bring their own hermeneutical (biblical interpretative) frameworks shaped more by tradition and liturgy than by the covenant/dispensational distinction as Protestants understand it.

Among dispensational traditions, Pentecostal and charismatic churches are most commonly aligned with a dispensational approach to Scripture. Please note that there will be variations of both covenant and dispensational doctrine among all the above nominated denominations; my identification of these traditions is broad and merely based on my experience and not on any empirical evidence attributed to any particular church or denomination.

How you understand and embrace the difference between Covenantal and Dispensational theology will shape your entire theological world-view — and that world-view will, in no small measure, determine how you live out your faith in the world. The distinction, then, is worth understanding carefully.

Covenantal Theology: What is it?

Covenantal theology reads all of Scripture through the lens of covenant — and at the centre of that story stand two figures: Adam and Jesus Christ. Covenant theologians find biblical warrant for such a focus in 1 Corinthians 15:45: “Thus it is written, “The first man Adam became a living being”; the last Adam became a life-giving spirit.” One might loosely say that covenant theology sees Adam and Jesus Christ as theological book-ends. For covenant theology, the church begins with Adam and finds its fulfilment in Jesus Christ.

The theological glue that holds covenant theology together is the very word covenant. According to theologian Guy Waters, “Covenant theology understands God to have made two basic covenants within human history. There is the first covenant that God made with Adam in the garden (often called the covenant of works), and there is the second covenant that God made with Christ (often called the covenant of grace).”^[1] Some covenant theologians also recognise a third covenant — the covenant of redemption — an eternal agreement within the Trinity to accomplish human salvation.^[2] 

If the Bible is to be our only true, authoritative, and reliable guide in our theological analysis, then I have to ask where in the Bible do we find these three covenants identified or established?

The Covenant of Works: Where is it in Scripture? It is nowhere to be found. It is a theological assumption. Where is the covenant of grace found in the Bible? It is nowhere to be found. It is the same for the covenant of redemption, nowhere to be found.

These three covenants are theological assumptions. Anticipating our discussion in the next part of this series — dispensationalism — the same critical analysis will also be applied. As you will find, dispensationalism is also based on theological assumptions. However, let's briefly go through these three covenantal theological assumptions.

The Covenant of Works

The late reformed theologian R. C. Sproul explains it simply and well: “The covenant of works refers to the covenant that God made with Adam and Eve in their pristine purity before the fall, in which God promised them blessedness contingent upon their obedience to His command.”[3] The arrangement Sproul describes is clearly present in Genesis 2:15-17. “The Lord God took the man and put him in the garden of Eden to work it and keep it. And the Lord God commanded the man, saying, 'You may surely eat of every tree of the garden, but of the tree of the knowledge of good and evil you shall not eat, for in the day that you eat of it you shall surely die.’” What is absent is the word covenant itself — the term is never used. The covenant of works is a theological inference, not an explicit biblical designation.

The Covenant of Grace

Using Sproul’s definitions again, “The covenant of grace indicates God’s promise to save us even when we fail to keep the obligations imposed in creation. This is seen most importantly in the work of Jesus as the new Adam.”[4] The covenant of grace has a slightly stronger biblical foothold, though the term itself remains absent from Scripture. According to theologian Tom Hicks, “This covenant of grace was inaugurated in Genesis 3:15, immediately after the fall, when God promised His people that the Seed of the woman would crush the head of the serpent.”[5] Again, this covenant of grace is a theological assumption, a constructed theological theory.

The Covenant of Redemption

Theologian Pascal Denault draws on 2 Timothy 1:9 for this explanation: “Because of his own purpose and grace, which he gave us in Christ Jesus before the ages began.” The key phrase being, “before the ages began.  " Denault writes, “From all eternity the plan of redemption exists in God. This plan involves the incarnation of the Son in order to redeem the fallen posterity which was given to Him and bring them to eternal life.”[6] The eternal purpose of God described in 2 Timothy 1:9 is biblically grounded. Whether it constitutes a formal covenant between the persons of the Trinity is, once again, a theological inference rather than an explicit biblical designation.

In Conclusion

We have briefly described the three-part construction of covenant theology, being the covenant of works, the covenant of grace and the covenant of redemption. All three are theological inferences with no exact or definite biblical designation. However, it is important here to state that there are many aspects of Scripture where theological constructs are made; the term Trinity is a classical case of a theological construct, the term appears nowhere in the Bible, yet it is confidently held to be true.

Inference is sometimes a dangerous game to play in theology. All three covenants represent inferred rather than explicitly revealed doctrine. The danger is that those not educated in theology may take such inferences as propositional doctrine, as being absolutely true. This does not render covenant theology invalid, but it calls for careful handling — distinguishing between what Scripture explicitly reveals and what the church has thoughtfully, if tentatively, constructed from it.

There is a further danger in that covenant theology sees no break in the continuity of God’s covenant people, the Israelites (the Jews) and the people of the new covenant established by Jesus and the Holy Spirit on the day of Pentecost. The Israelites and those of the new covenant are all considered part of the church. There is no distinction. While not all covenant theologians hold this view, it is sufficiently widespread to have produced significant doctrinal consequences, which leads to a very pernicious doctrine of ‘replacement theology’. Many literally read the word ‘Israel’ in the Bible and construe it to mean the ‘church’. We will return to replacement theology after examining dispensational theology in the next part, where the distinction between Israel and the church becomes decisive.

A Positive Note to End re: Covenant Theology

There is a unifying continuance; one unbroken story of God's faithfulness from Adam to Jesus Christ.

A Negative Note to End About Covenant Theology

Replacement theology has a tendency to create an undercurrent of antisemitism, a bit like being in a riptide and not knowing you are being sucked out to sea: beware of replacement theology. At its worst, covenant theology severs the Jews from their identity as God's chosen people, a consequence with grave historical and present-day implications.

[1] Guy Waters, ‘What Is Covenant Theology? A Guide to the Bible’s Structural Unity’, Word by Word, 22 January 2026, https://www.logos.com/grow/what-is-covenant-theology/.

[2] ‘Covenant Theology’, Ligonier Ministries, accessed 14 March 2026, https://learn.ligonier.org/guides/covenant-theology.

[3] R. C. Sproul, ‘The Covenant of Works by R.C. Sproul’, Ligonier Ministries, accessed 14 March 2026, https://learn.ligonier.org/articles/covenant-works.

[4] Sproul, ‘The Covenant of Works by R.C. Sproul’.

[5] Office Admin, ‘Covenant Theology: The Law, Justification, and Sanctification’, Founders Ministries, 23 March 2018, https://founders.org/articles/covenant-theology-the-law-justification-and-sanctification/.

[6] Pascal Denault, ‘From the Covenant of Works to the Covenant of Grace’, Founders Ministries, 26 April 2017, https://founders.org/articles/from-the-covenant-of-works-to-the-covenant-of-grace/.