An Overview of Dispensationalism and Covenant Theology

How should we interpret the Bible? Dispensationalism and Covenantalism are competing approaches to interpreting the Bible that frequently reach very different conclusions. Which one makes better sense?

The Bible can be a confusing book, as evidenced by the many Christians who struggle to properly interpret it. Undoubtedly, a major contributing factor to this confusion is the diversity of interpretations offered by pastors and professors. If these experts disagree on how to read Scripture, how can the average believer hope to rightly divide the word of truth? Among Evangelicals, two interpretive systems dominate the theological landscape: Dispensationalism and Covenant Theology. This article will provide a basic overview that will define and contrast these two competing systems while explaining how each view impacts one’s understanding of the biblical narrative.

Dispensationalism is often misunderstood as being a system that cares primarily about the nation of Israel; however, it is much more than that—it is a comprehensive hermeneutical system that has major implications, particularly in the areas of ecclesiology and eschatology (the studies of the church and end times, respectively). Michael Vlach provided the following definition of the view:

Dispensationalism is a system of theology primarily concerned with the doctrines of ecclesiology and eschatology that emphasizes the historical-grammatical meaning of Old Testament prophetic passages and covenants, a distinction between Israel and the church, and a future salvation and restoration of the nation Israel in a future earthly kingdom.1

While Dispensationalism emphasizes a straightforward understanding of the text according to the interpretive principles for the various genres, Covenant Theology views all of Scripture through the lens of either two or three covenants:

Covenant theology is a system of interpreting the Scriptures on the basis of two covenants: the covenant of works and the covenant of grace. Some covenant theologians specify three covenants: works, redemption, and grace.2

According to adherents of Covenant Theology (Covenantalists), Adam was initially under the covenant of works. If he would not have sinned, then he would have procured salvation for himself. But upon his rebellion, every person has been under the covenant of grace, which encompasses the other major covenants in Scripture. The covenant of redemption refers to a supposed covenant made in eternity past between members of the Godhead related to how the Son of God would redeem mankind.

Proponents of both positions agree on fundamentals of the Christian faith and are orthodox. They believe God is triune, and that Jesus is the Son of God whose atoning death and resurrection are the only means by which a sinner can be saved. Nevertheless, these two approaches yield significantly different understandings of Scripture.

Dispensationalism believes that the Old Testament stands on its own. That is, while the New Testament sheds light on the Old Testament, it does not change the meaning of a given Old Testament passage. This is due to its emphasis on the historical-grammatical hermeneutic (interpreting the text while taking into account the cultural and historical background as well as the technical details of the language).

Covenant Theology emphasizes soteriology (study of salvation), endorsing a redemptive-historical hermeneutic, which means that all Scripture is read through a lens that sees God’s salvation of sinners as being the primary purpose of history. This leads its proponents to adopt New Testament priority—i.e., New Testament passages are used to interpret Old Testament texts in ways that were never intended by the original human authors.

These competing approaches make an enormous difference in how major themes in Scripture are understood. Perhaps the most noticeable difference surrounds the relationship between Israel and the church. Since Dispensationalists give equal priority to both testaments, they believe that Israel still holds a unique place in God’s plan because numerous prophecies about Israel have not been fulfilled yet. As such, Dispensationalists believe that these prophecies will be fulfilled in relation to the Second Coming and Millennial reign of Christ.

Covenantalists claim that God’s promised blessings for Israel should be transferred to the church because Jesus is the fulfillment of the Law and the church replaces or supersedes Israel. And now that Christ’s bride, the church, is here and the gospel has been sent out to all nations, it does not seem to make sense that the Lord would shift His focus back to just one nation. As a result, scores of Old Testament prophecies are spiritualized, such as the last several chapters of Ezekiel. New Testament prophecies that seem to be about Israel must also be reinterpreted to refer to the church. For example, the thousand-year period mentioned six times in Revelation 20 is not understood as a literal fulfillment of the Old Testament kingdom promises to Israel. Instead, covenantalists interpret it non-literally as either a spiritual kingdom or one that does not last for a millennium, or if they do interpret it as a literal millennium, then it is not specifically for Israel.

Another major difference between these two positions involves one’s understanding of the Old Testament Law. For Dispensationalists, the Mosaic Law was given to the people of Israel for a specific time and place. Hebrews 8:13 states that the Mosaic covenant has been made obsolete by the new covenant instituted by Christ. And since Dispensationalists do not conflate Israel and the Church, the Mosaic Law is not binding on Christians who are under “the law of Christ” (Galatians 6:2). However, since covenantalists view all of the biblical covenants as being different aspects or expressions of the overarching covenant of grace, the Mosaic Law must still be in place for the church in some way. Typically, they divide the Mosaic Law into civil, ceremonial, and moral laws. With Christ’s sacrificial death, the ceremonial or sacrificial laws were set aside, but the civil and moral are still in effect, although they are sometimes adapted to fit one’s cultural setting. It must be stated that while these categories may be helpful in understanding the types of laws described in the Pentateuch, the Bible never divides the Mosaic law in such a way. Instead, the Mosaic law is always treated as a whole unit: “For whoever shall keep the whole law, and yet stumble in one point, he is guilty of all” (James 2:10, cf. Galatians 5:3).

I believe Dispensationalism is a far better system of interpretation, since the meaning of the text is viewed as residing in the text itself, rather than depending on one’s reinterpretation as seen through the lens of the New Testament, as is the case with Covenant Theology. Furthermore, Covenant Theology sees all of Scripture through the lens of two or three covenants that are never mentioned in Scripture (covenant of works and covenant of grace). Consistent with the Dispensational approach, the New Testament characters and authors interpreted the Old Testament in a contextual manner.3 Dispensationalism also allows the Old Testament prophecies about Israel’s future to be fulfilled in a manner consistent with other prophecies. Finally, whereas Covenant Theology views God’s redemption of fallen humans as the focus of history, Dispensationalism emphasizes that Christ’s atonement leads to a restoration of all creation. Thus, while both emphasize God’s glory, Covenant Theology tends to focus on man’s salvation and Dispensationalism calls attention to what God is doing to restore and renew all of His creation, including mankind.

  1. Michael J. Vlach, Dispensationalism: Essential Beliefs and Common Myths, Revised and Updated (Los Angeles, CA: Theological Studies Press, 2017), 50. 

  2. Paul Enns, The Moody Handbook of Theology, (Chicago, IL: Moody Press, 1989), 503. 

  3. Of the roughly 360 New Testament quotations or citations of Old Testament texts, Covenantalists often point to about five that they believe have been reinterpreted by the New Testament authors. Dispensationalists like Abner Chou (The Hermeneutics of the Biblical Writers) and Michael Vlach (The Old in the New) have shown how these examples have not been reinterpreted by New Testament authors. However, even if these few passages had been reinterpreted by New Testament authors, this would mean that less than 2% of the Old Testament citations in the New Testament have been reinterpreted. This is hardly a solid basis on which to build a hermeneutic in which one must reinterpret scores of passages. Furthermore, the writings of the New Testament were inspired by the Holy Spirit. Covenantalists certainly do not believe their writings are likewise inspired, so why adopt a hermeneutic that implies as much and that overrides the plain meaning of the text? 


An Overview of Dispensationalism and Covenant Theology — 1 Comment

  1. Dr. Chaffey, I am currently reading your book, “Fallen” and appreciate the thoughtful and thorough way you examine the Scripture to come to your conclusions. I discovered this blog through your citing of your articles on the Cursing of Canaan by Noah in your book. I found the articles fascinating as I have always struggled to understand that passage and had not heard of any of the four explanations you put forth. Upon reviewing various articles on your blog I am thankful that I found it. Many teachers and pastors put forth opinions on difficult passages but so few examine their reasons yea or nay as thoroughly as you do and fewer still explain them as plainly as you do.

    After reading this article on the differences between Dispensationalism and Covenant Theology I had to write to thank you. Since coming to Christ 20 years ago I have been a Dispensationalist. I believe that God keeps His promises and one of His promises is to love His people Israel forever (2 Samuel 7:23-24, Isaiah 44:21, Romans 11:1-2, etc.). I am a Dispensationalist for other reasons many of which you outline in your article. As of the past few years I have found that whenever I mention my beliefs I am met with anger and insults by many of those professing Covenant Theology. Not all, of course, but quite a few. These insults are especially hurtful because they come from other believers, brothers and sisters in Christ. I know disagreements often become heated but we should never insult another Christian because they hold a different viewpoint. I do not hold to TULIP but I would not consider a Calvinist brother or sister as non-Christian and insult them. I fear I’m getting off topic so let me just end by saying thank you for your viewpoint on this subject. It was like a breath of fresh air to me.

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