Lifehouse was founded by leader and singer Jason Wade (vocals, guitar) and his friends Sergio Andrade (bass), and Jon Palmer (drums) providing the core trio. Collin Hayden (additional guitar) and Aaron Lord (violin, viola, mandolin, additional guitars) were added to the lineup soon after. The band was originally the worship band for FKA, the youth group at the Malibu Vineyard church, where they served together for several years until 2000, along with other musicians like Kendall Payne and Gabe Watkins.

When Jason was 15 years old, Kate Miner, who at the time was overseeing the worship ministry at the church, introduced him to friend and collaborator Ron Aniello, who helped Jason to hone his skills. Working with Aniello as producer, the young men released a demo album in 1999 under the name Blyss entitled Diff's Lucky Day. Originally intended for sale at concerts or at church, or for giving to friends or potential industry contacts, these limited-release CDs surprised everyone when they began to sell for hundreds of dollars on eBay. Five of the twelve tracks were remixed and released on No Name Face. Because of his charisma and talent, DreamWorks Records focused their sights solely on frontman Jason Wade, and by the time the debut album was released on October 31, 2000, Wade and Andrade were the only remaining founding members. Rick Woolstenhulme replaced Jon Palmer on drums, and later his brother Sean was added on guitar (also a former guitarist for The Calling).

Jason's lyrics are deep and questioning, and profoundly spiritual. Growing up as a missionary kid, he spent a lot of time overseas. His parents' divorce left him with hard questions to wrestle with, and this comes out in his songwriting. Fortunately, he is not afraid to ask the hard questions, and being signed on a secular label allows him the freedom to do so.

"Hanging by a Moment" was also labeled the Most Played Song of 2001.

In April 2004, it was confirmed that Sergio Andrade and Sean Woolstenhulme had decided to leave the band to pursue individual projects. Jason Wade and Rick Woolstenhulme remain active members of Lifehouse. On July 6, 2004, they went to Maryland to begin work on their third album, Lifehouse, which was released on March 22, 2005.

Their single "You and Me", was released for airplay on January 18, 2005. It was written several years ago and originally performed by Jason Wade in the 2000 independent film "All Over Again". Bryce Soderberg joined the band in late 2004, filling in for Andrade on bass.

The music video for their second single, "Blind", was released October 19, 2005. It stars Napoleon Dynamite's own Tina Majorino, known as "Deb" in the film.