The captivity of the king and people of Judah in Babylonia (597–539 BCE). War between Egypt and Babylonia was disastrous for little Judah, lying between them. After the Babylonian victory at Carchemish in 605 BCE and the resumption of hostilities in 604, King Jehoiakim switched his allegiance from Egypt to Babylonia. But he continued to have half a hope in Egypt and rebelled against Babylonia (2 Kgs. 24: 1). It was a foolish decision and made against the advice of Jeremiah. The Babylonians marched; Jerusalem surrendered (2 Kgs. 24: 10–17), and the leading citizens were deported to Babylon (597 BCE), which represents the beginning of the Exile, or Captivity, of the Jews. About 10,000 people were deported (though a smaller figure is given by Jer. 52: 28), but many still remained in Palestine and a weak puppet king (Zedekiah) was installed. He too rebelled in 588 and two years later the capital fell to the Babylonians, and there was massive destruction. Many of the inhabitants were taken to Babylonia, though some managed to flee to Egypt, and there is evidence that some settlements to the north of Jerusalem in Benjamin still continued.

In 539 BCE Cyrus, king of Persia, captured Babylon and in accordance with his policy towards subject peoples he permitted Jews to return to Palestine, although many preferred to stay put in Babylon where they had become moderately comfortable. The Exile had ended; there was little change in material conditions, but the Dispersion (Diaspora) had begun, and with it an era of theological creativity which was to reshape the great bulk of the OT which is pre‐exilic material. OT studies therefore give far more attention to the post‐exilic period than does the OT itself. This was the era when the editorial work on the Pentateuch was finalized.

In Babylon the exiles enjoyed a degree of freedom and were able to maintain communication with relatives still surviving in an impoverished Palestine. In exile new importance was attached to Sabbath observance and circumcision, and synagogues, which constituted a revaluation in Jewish worship, may possibly have been established in this period. All this was part of the response to the challenge to faith in Yahweh by the fate of the Jerusalem Temple: it was the footstool of God (Lam. 2: 1), his dwelling place (Ezek. 43: 7), and a visible symbol of the nation's self‐consciousness as a chosen race. Now it was a heap of rubble. Moreover, the dynasty of David, to which so much had been promised, had come to an end which became in fact a new beginning.

Not all the responses to the challenge of exile were equally positive. Some people were deeply nostalgic and tearful (Ps. 137: 5–6) and uttered a savage curse upon their enemies (Ps. 137: 9). Some turned to other gods (Ezek. 20: 32), and some in self‐pity blamed calamity on the previous generation (Jer. 31: 29). More optimistically, some expected a new intervention from above (Deutero‐Isaiah). Generally, the exiles emphasized, one way or another, their national identity as Jews among foreigners.