The earliest incarnation of the group was simply a small gathering of minds between Magnus Bane, Lily Chen, Maia Roberts, and Alec Lightwood, who later became known as the founders of group. The first discussions were solely only to resolve issues and Cold Peace conflicts in New York City. They were soon joined by Jace Herondale and Clary Fairchild after their appointment as heads of the New York Institute, and later by Isabelle Lightwood, Simon Lewis, and the members of Lily and Maia's respective clan and pack.
With Alec expecting himself to be busy with his new duties as Consul, he approached Mark Blackthorn and asked him to help head up the Alliance as an ambassador to Faerie along with Cristina Rosales. 
- Rumors circulated in 2012, spread by anti-Downworlders, that the Alliance was being shut down.