Covenant Theology vs. Dispensationalism; What’s the Difference?


Lord’s Library editors explore various theological systems by comparing covenant theology vs. dispensationalism.

When trying to understand how different Christian denominations study the Bible, it’s important to know that there are two main theological systems; covenant theology and dispensationalism. When comparing covenant theology vs. dispensationalism, it is easy to see that they offer contrasting views of how to approach the Scriptures. This can be confusing to learn, especially if you’re new to the faith or just beginning to explore more complex theological ideas.

As a result, the editors at Lord’s Library assembled this resource to compare covenant theology vs. dispensationalism. It’s important to know that while each framework may lead to a different understanding of Bible and church history, both do ultimately conclude that salvation comes by grace through faith in God through Jesus Christ. This guide begins with a comprehensive definition of each theology, along with a summary, and a comparison of key points at the bottom. We used Bible Scripture wherever possible to provide additional context.

The GospelCovenant Theology vs. Dispensationalism

What is Covenant Theology? Covenant Theology Definition

Covenant theology sees the Bible and the narrative of God through the lens of covenants, or, a mutual agreement of two or more entities; a contract. Within this framework, there are three main covenants: the covenant of works, the covenant of grace, and the covenant of redemption. Covenant theology is also known as coventalism, federal theology, or federalism.

Covenant Theology Chart

The covenant of works started in the beginning with the Garden of Eden. In Genesis 2:16-17 (KJV) the Bible says “And the Lord God commanded the man, saying, Of every tree of the garden thou mayest freely eat; But of the tree of the knowledge of good and evil, thou shalt not eat of it: for in the day that thou eatest thereof thou shalt surely die.” These two verses set out the terms of an agreement of obedience between God and man, which saw the creation of the covenant of works.

This extended throughout the Bible’s Old Testament via the laws given to Moses and the covenant that God made with His people involving blessings for obedience and curses for disobedience. This covenant can be seen clearly in Leviticus 26. As the Bible makes clear, man cannot live up to a standard of perfection due to its corruption from sin. As a result, a new covenant had to be made so men could attain salvation; the covenant of grace.

The covenant of grace was made via the fulfillment of Genesis 3:15 through the birth, life, death, and resurrection of Jesus Christ. Unlike the covenant of works, grace made it so salvation was no longer conditional on obedience like during the time of the first covenant. The covenant of grace is an expression of God’s love and the only condition is faith in Him. In Ephesians 2:8-9 (KJV), the Bible says “For by grace are ye saved through faith; and not that of yourselves: it is a gift of God: Not of works, lest any man should boast.”

The covenant of redemption is the contract between God the Father and Jesus for his becoming incarnate, suffering, and dying on the cross for mankind as to make atonement. In return for this blood sacrifice, God the Father raised Christ from the dead to glorify him. Additional text regarding this covenant can be easily seen in Psalms 2 and 110, Isaiah 53, Phillippians 2:5-11, and Revelation 5:9-10.

When studying the Bible, people who ascribe to the covenant theology framework see everything through one of these covenants. They look at the entire biblical narrative as being split up into these two covenants and see all people as being underneath these. Covenant theology has remained the most popular method of interpreting the scriptures for Protestants and those who tend to be more Reformed or Calvinistic.

Covenant Theology Defined

Covenant theology is an interpretive framework for understanding the Bible that splits the narrative up into covenant of works and a covenant of grace, viewing all Bible history and events through one of these lenses.

What is Dispensationalism? Dispensationalism Definition

Dispensationalism has grown increasingly popular in nondenominational churches since the 19th century. This theological framework is most commonly seen in Baptist, Pentecostal, and various Charismatic Movements. Similar to covenant theology, dispensationalism splits up the Biblical narrative into pieces. Dispensationalists see Bible history through seven distinct dispensations, or periods of time. The seven dispensations are:

Dispensations Chart

Dispensations represent the different ways God interacts with mankind during a specific period of Bible history. These age-specific plans are administered in a way that holds humanity in account during a given time period. Dispensationalism is based on a literal translation of the Old and New Testaments in the Bible which view God’s plans as unique depending on the age. As a result, they simply see the New Testament as providing new information that can build on the Old Testament but not change its meaning.

Dispensationalism begins with the presupposition that Bible history has a discontinuity in the way God reacts to human free will through time. Dispensationalists also profess a major distinction between Israel and the church. That is, while Israel is considered to be an ethnic nation, the church consists of all saved people inside the present dispensation. Premillennialists, or those who affirm a future 1,000-year reign of Jesus Christ, are considered to be dispensationalists as well. The dispensational movement began with John Nelson Darby around 1830.

Dispensationalism Defined

Dispensationalism is an interpretive framework for understanding the Bible that splits the narrative up into sections (dispensations) and focuses on how God interacts with mankind differently within each age.

Covenant Theology vs. Dispensationalism; What’s the Difference?

A contextual vs. literal view is the most glaring of the differences between covenant theology vs. dispensationalism. While those who practice covenant theology may include more historical and cultural context to their Bible interpretation, dispensationalists may consider little beyond the depth of the Scriptures. Dispensationalists are careful to consider who God speaks to during the different parts of Bible history

Detractors of covenant theology commonly refer to it as “replacement theology” because of the perception that it teaches that God replaced the Jews with Christians as His chosen people. In contrast, followers of covenant theology see the fulfillment of God’s promises to Israel through Jesus Christ. Covenant theology views Israel and the Church as making up one people throughout history while dispensationalists profess a definite distinction. Covenant theologians also hold that Old Testament promises made to Israel are transferred to Christians in the New Testament.

Dispensationalists refer to the current period in history as “the church age” where God is focused in on the salvation of Christians. This includes the belief that Israel and the Church will be protected via different means in the end days to come.

There are several key differences between using covenant theology vs. dispensationalism as an interpretation for understanding Bible Scripture. While they will lead to different conclusions on disputed Christian doctrines, it is imperative to remember always that the essentials of the faith are what is important in any Biblical framework.

Whether you subscribe to covenant theology or dispensationalism, both these two Bible interpretation techniques hold to the truth that salvation comes by grace through faith in Jesus Christ.

Timothy Andrew
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Timothy Andrew

Timothy Andrew

Tim is the Founder of Lord's Library. He believes the Bible commands us to minister "as of the ability which God giveth" (1 Peter 4:11). Tim aspires to be as The Lord's mouth by "taking forth the precious from the vile" (Jeremiah 15:19) and witnessing The Gospel of Jesus Christ (1 Corinthians 15: 1-4) to the whole world.

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