The company was founded in Tel Aviv in 1946 as a partnership of Zvi Levin (also known as Hirsch Lewin) with Josef Grossman, Alexander Borowitz and Ephraim Ruttenberg. Mr. Levin was an emigrant from Berlin where he owned and operated a bookshop and recording label Semer (from the Hebrew "Zemer", meaning song). The Semer label operated from approximately 1932 until the recording masters and inventory were smashed and burned during Kristallnacht.
Hed-Arzi started operating in September 1947, managed by Ephraim Felix Rzeczynski, making it the oldest recording company in Israel (followed by Makolit in Jaffa, Tslil in Tel-Aviv and others).
In 1951, company started building a plant in Ramat-Gan.
In 1980, 50% share was sold to Modi’in Publishing House, ltd. (the parent company of the newspaper Maariv), since 1993 owned by Israel Land Development Company, ltd.