Chapter 4: The Covenant of Grace

The previous chapters examined the Covenant of Works and the Covenant of Redemption. The Covenant of Grace completes the first, systematic-theological portion of the course. The next stage will trace the biblical covenants as they unfold historically, but the three theological covenants provide the framework for understanding that history.

The Covenant of Works explains humanity’s original obligation and condemnation in Adam. The Covenant of Redemption explains Christ’s eternal appointment and obedient work as the second Adam. The Covenant of Grace is the historical administration through which God offers and gives to sinners the salvation Christ merited.

Names for the Covenant

The Covenant of God

Scripture sometimes refers simply to “his covenant,” because the Covenant of Grace is the covenant par excellence in the history of redemption.

“The friendship of the LORD is for those who fear him, and he makes known to them his covenant.” —Psalm 25:14

“He sent redemption to his people; he has commanded his covenant forever.” —Psalm 111:9

The Everlasting Covenant

The covenant is also called everlasting because God’s promise extends through the generations and reaches its consummation in the new creation.

“I will establish my covenant between me and you and your offspring after you throughout their generations for an everlasting covenant, to be God to you and to your offspring after you.” —Genesis 17:7

“He remembers his covenant forever, the word that he commanded, for a thousand generations.” —Psalm 105:8

The Covenant of Grace

The preferred theological name emerges from its contrast with the Covenant of Works. Adam’s covenant required obedience as the ground of inheritance. After the fall, sinners cannot obtain life by that covenant. God therefore administers salvation by grace, through faith in Christ, on the basis of Christ’s obedience.

Historical Development

Of the three theological covenants, the Covenant of Grace appeared first in the historical development of Reformed covenant theology. The immediate context was the sixteenth-century debate with the Anabaptists over the continuity of the church and the inclusion of believers’ children.

In 1525, Huldrych Zwingli argued that the children of believers belong to God’s covenant people just as the children of Abraham did. Heinrich Bullinger developed the larger theology in Concerning the One and Eternal Testament or Covenant of God (1534). Calvin likewise emphasized the substantial unity of salvation under the old and new administrations.

The concern was larger than baptism. Reformed theologians sought to confess that Old Testament saints possessed the same mediator, the same gospel, the same saving faith, and the same heavenly inheritance as Christians. The forms of administration differed, but the substance was one.

Definition

Michael Brown and Zach Keele define the Covenant of Grace as the covenant between God and believers and their children, in which God promises salvation through faith in Christ, who merited salvation by his obedience in the Covenant of Redemption.

This definition identifies the parties, promise, instrument, and foundation. God enters covenant with believers and their children. He promises salvation. That salvation is received through faith in Christ. Christ secured it through his active and passive obedience under the Covenant of Redemption.

The Biblical-Theological Argument

The Bible does not narrate a single ceremony with the caption, “God now made the Covenant of Grace.” The doctrine arises from the organic continuity connecting the first gospel promise, the Abrahamic covenant, and the new covenant.

Promise, Faith, and People in Genesis 3

The Covenant of Grace begins with the protevangelium in Genesis 3:15. God promises that the offspring of the woman will defeat the serpent, although the serpent will wound him. This promise announces a second Adam who will accomplish what the first Adam failed to do.

Adam and Eve respond to this promise in faith. Adam names his wife Eve, “the mother of all living,” even though the sentence of death has just been pronounced. His act suggests trust that God will preserve life and fulfill the promised offspring. God then clothes the guilty pair with garments of skin. The text does not explicitly call this a sacrifice, but the death of an animal to cover their shame anticipates the sacrificial pattern by which guilt is covered through substitution.

The promise creates a people who live by faith. Cain and Abel both appear within the worshiping covenant community, although Cain proves unbelieving. In the line of Seth, people begin to call upon the name of the LORD. Genesis 5 traces the covenant line from Seth to Noah, and Genesis 11 traces it from Noah to Abraham. The Covenant of Grace therefore proceeds historically through families, while always distinguishing outward membership from inward faith.

The recurring pattern is promise, faith, and people. God gives the promise; faith receives it; and those gathered around the promise become the visible people of God.

The Abrahamic Covenant as “the Promise”

Paul repeatedly calls the Abrahamic covenant “the promise.” Romans 4 teaches that Abraham’s inheritance did not come through law but through the righteousness of faith. Galatians 3 contrasts the promise given to Abraham with the Mosaic law added 430 years later.

“That is why it depends on faith, in order that the promise may rest on grace and be guaranteed to all his offspring.” —Romans 4:16

“If the inheritance comes by the law, it no longer comes by promise; but God gave it to Abraham by a promise.” —Galatians 3:18

The same pattern therefore reappears: God gives a promise, Abraham receives it by faith, and a covenant people is constituted around that promise.

Hebrews 11 says that Abraham, Isaac, and Jacob lived in the land as heirs of the same promise. Their hope was not exhausted by Canaan. They desired a better, heavenly country and looked for the city whose builder and maker is God.

Abraham as the Father of Christian Believers

Romans 4 does not treat Abraham merely as an illustration loosely resembling Christian faith. Paul calls him “the father of us all.” Abraham believed that God could give life to the dead, and Christians believe in the God who raised Jesus from the dead.

“The words ‘it was counted to him’ were not written for his sake alone, but for ours also. It will be counted to us who believe in him who raised from the dead Jesus our Lord, who was delivered up for our trespasses and raised for our justification.” —Romans 4:23–25

The Abrahamic covenant and the new covenant therefore administer the same saving substance. The promise is fulfilled in Christ, and all who belong to Christ are Abraham’s offspring and heirs according to promise (Gal. 3:29).

The promised “offspring” also links Abraham back to Genesis 3:15. Paul identifies the climactic offspring as Christ. The line runs organically from the woman’s offspring, through Abraham’s offspring, to the incarnate Son and those united to him.

The Covenant Formula

The recurring covenant formula also demonstrates continuity:

“I will be their God, and they shall be my people.”

God speaks this promise to Abraham, repeats it in the Mosaic administration, renews it in Jeremiah’s new-covenant prophecy, and brings it to consummation in Revelation 21. The history of redemption is not a succession of unrelated peoples and plans. It is the unfolding of one divine purpose to dwell with one redeemed people through one mediator.

One Covenant of Grace from Genesis 3:15 to the Consummation

Three considerations establish the substantial unity of the Covenant of Grace.

One Mediator

Old Testament believers were saved by Christ. Paul says that Israel drank from the spiritual Rock, “and the Rock was Christ” (1 Cor. 10:4). Jesus says that Moses wrote of him and that Isaiah saw his glory. On the road to Emmaus, he interprets Moses and all the Prophets as bearing witness to his suffering and glory. The saints before Christ did not possess a different savior or a merely earthly religion. They trusted the Messiah promised in types, sacrifices, prophecies, and covenant ordinances.

One Way of Salvation

Abraham believed God, and righteousness was counted to him apart from works. The Westminster Confession explains that under the law the Covenant of Grace was administered by promises, prophecies, sacrifices, circumcision, the Passover, and other ordinances. Through the Spirit, these means instructed and built up the elect in faith in the promised Messiah, through whom they received forgiveness and eternal salvation. The administration was more obscure and burdened with types, but the saving principle was the same: grace in Christ received by faith.

One People of God

Because there is one mediator and one way of salvation, there is one covenant people. Gentile believers were formerly alienated from the commonwealth of Israel and strangers to the covenants of promise. Through Christ’s blood they have been brought near.

“The Gentiles are fellow heirs, members of the same body, and partakers of the promise in Christ Jesus through the gospel.” —Ephesians 3:6

The repeated prefix “fellow” is decisive. Gentiles do not form a second people with a separate destiny. They are incorporated into the people of promise.

Calvin summarizes the continuity:

“All whom, from the beginning of the world, God adopted as his peculiar people, were taken into covenant with him on the same conditions, and under the same bond of doctrine, as ourselves … The Fathers were partakers with us in the same inheritance, and hoped for a common salvation through the grace of the same Mediator.” —Calvin, Institutes 2.10.1

With Whom Is the Covenant of Grace Made?

A difficult question now arises. Is the Covenant of Grace made only with the elect, or is it made with professing believers and their children? Both formulations express an important aspect of the biblical teaching.

The Covenant and the Elect

If Christ is the substance of the Covenant of Grace, then only those truly united to Christ possess its saving substance. Olevianus therefore wrote On the Substance of the Covenant of Grace Between God and the Elect. Witsius, Petrus van Mastricht, and Wilhelmus à Brakel also speak of the covenant as made with the elect.

The covenant’s proper and ultimate purpose is the salvation of the elect. Only the elect receive effectual calling, justification, adoption, sanctification, perseverance, and glorification. In them the covenant is not merely external; it becomes an inward communion of life, with the law written upon the heart.

The Visible Covenant Community

The Covenant of Grace is also historically administered through the visible church. God freely offers life and salvation in Christ and gathers a community around that promise. This visible covenant community includes those who profess faith and their children.

“Man, by his fall, having made himself incapable of life by that covenant, the Lord was pleased to make a second, commonly called the covenant of grace; wherein he freely offers unto sinners life and salvation by Jesus Christ.” —Westminster Confession 7.3

The offer is genuine and covenantal. It establishes real obligations and privileges. Baptized members receive the Word, worship, discipline, sacraments, and the promise addressed to them. Yet outward membership does not guarantee election or regeneration.

The Heidelberg Catechism applies this visible administration to covenant children:

“Infants as well as adults are included in God’s covenant and people … Therefore, by baptism, the sign of the covenant, they too should be incorporated into the Christian church and distinguished from the children of unbelievers.” —Heidelberg Catechism Q. 74

Vos’s Twofold Distinction

Vos reconciles the two formulations by distinguishing the covenant as a legal relationship from the covenant as a communion of life.

As a legal and historical relationship, the Covenant of Grace includes believers and their children. It proceeds through families and is administered visibly in the church. Members receive covenant signs, promises, commands, warnings, and discipline.

As an inward communion of life, the covenant belongs only to the elect, who are united to Christ by the Holy Spirit. They receive the saving substance rather than merely the outward administration.

Romans 9 illustrates the distinction:

“Not all who are descended from Israel belong to Israel, and not all are children of Abraham because they are his offspring … It is not the children of the flesh who are the children of God, but the children of the promise are counted as offspring.” —Romans 9:6–8

Ishmael and Isaac both received outward covenant privileges, but only Isaac was the child of promise. Esau and Jacob both belonged outwardly to the covenant household, but God’s electing purpose distinguished them. The visible administration is real, yet it is not identical with the secret decree of election.

This distinction prevents two opposite errors. We must not say that every baptized member is regenerate and can never fall away from grace. Nor should we say that nonelect members have no covenant relationship at all. They stand in the outward administration and are accountable for the privileges they receive.

The Covenant of Redemption and the Covenant of Grace

A minority of Reformed theologians combined the Covenant of Redemption and the Covenant of Grace into one overarching covenant. Westminster Larger Catechism Q. 31 says that the Covenant of Grace was made with Christ as the second Adam and in him with all the elect. Thomas Boston preferred this formulation, while Charles Hodge and Francis Turretin regarded the difference largely as a matter of arrangement and clarity.

The two covenants are inseparable, but keeping them distinct is usually clearer, because they have significant differences. They have …

Different Parties

The Covenant of Redemption concerns the Father and the Son, with the Son acting as federal head of the elect. The Spirit is included according to his mission of application.

The Covenant of Grace concerns the triune God and the visible church, composed of professing believers and their children, while its saving substance belongs to the elect.

Different Conditions

The condition of the Covenant of Redemption is Christ’s active and passive obedience under the law. He fulfills righteousness and bears the curse.

The condition of the Covenant of Grace is faith in Christ. Faith does not merit the inheritance; it receives Christ and his righteousness.

Mediator and Fundamental Principle

The Covenant of Redemption has no mediator standing between the Father and the Son. The Son himself becomes mediator in the Covenant of Grace.

The fundamental principle of the Covenant of Redemption is works and merit. The fundamental principle of the Covenant of Grace is grace and promise.

“To the one who works, his wages are not counted as a gift but as his due. And to the one who does not work but believes in him who justifies the ungodly, his faith is counted as righteousness.” —Romans 4:4–5

Distinct but Interlocking

Christ the mediator links the two covenants. He earns the inheritance under the Covenant of Redemption and dispenses it to believers under the Covenant of Grace.

Witsius describes the Covenant of Grace as a testamentary disposition founded upon the prior covenant between the Father and the mediator. Hebrews 9 uses the flexibility of the Greek word diathēkē, which can mean covenant or testament:

“He is the mediator of a new covenant, so that those who are called may receive the promised eternal inheritance, since a death has occurred … For where a will or testament is involved, the death of the one who made it must be established.” —Hebrews 9:15–16

The Father promised the inheritance to Christ as reward. Christ then dies, and through that death the inheritance is bestowed upon those called to receive it. The Covenant of Grace is therefore grounded in the finished merit of the Covenant of Redemption.

Q&A

Did Covenant Theology Begin Only in the Reformation?

No. The systematic three-covenant formulation developed in the Reformed tradition, but the underlying questions are much older. The Epistle of Barnabas, Justin Martyr, Irenaeus, and especially Augustine all discussed the relation between the old and new covenants. Augustine also spoke of Adam’s probation and the reward of life in ways that anticipate later formulation of the covenant of works. The Reformers did not invent the biblical material; they organized it more explicitly.

Are the Elect “in Christ” before Conversion?

Ephesians 1:4 says that God chose the elect in Christ before the foundation of the world. In that decretal and federal sense, the elect are represented by Christ before they are effectually called. Yet until conversion they remain spiritually dead, under the power of sin, and outside the visible administration of the Covenant of Grace if they have not been raised within the church. The distinction is between eternal representation in the Covenant of Redemption and historical participation in the saving benefits of the Covenant of Grace. At effectual calling, the Spirit brings the elect into conscious faith and actual enjoyment of the salvation already secured for them.

How Should the Church Regard Covenant Children?

The church should regard baptized children according to the judgment of charity. They are members of the visible covenant community and should be addressed, taught, prayed with, and nurtured as belonging to Christ’s church. This does not mean that the church claims infallible knowledge of their election or regeneration.

Two errors must be avoided. One error treats covenant children as pagans until they can prove conversion through a dramatic experience. The opposite error assumes that baptism makes profession and perseverance unnecessary. Covenant children must be called to embrace Christ personally, confess their faith, and live in repentance.

If an adult covenant member openly refuses to profess faith or repudiates Christ, the church should not preserve the fiction that outward baptism alone establishes a credible Christian profession. Pastoral patience is necessary, especially with those struggling with assurance, but persistent unbelief eventually requires discipline.

The Three Covenants in Summary

The three theological covenants form one coherent structure.

1. In the Creator’s Covenant of Works, the first Adam receives a probationary mission and fails, bringing condemnation and death.
2. In the Father’s Covenant of Works with Christ, the second Adam fulfills the mission, bears the curse, and receives exaltation and the inheritance.
3. In the Covenant of Grace, the triune God gives Christ and his inheritance freely to sinners through faith.

The Covenant of Grace is therefore grace to us because the Covenant of Redemption was works for Christ. The gospel does not set aside God’s justice or lower the demand of the law. Christ satisfies both and freely shares the reward with his people.

Conclusion

The Covenant of Grace is the one saving covenant administered from Genesis 3:15 to the consummation. It is revealed initially in promise, formally established with Abraham, administered under Moses through types and shadows, fulfilled in the new covenant, and consummated when God dwells with his people in the new creation.

It has one mediator, one way of salvation, and one people. Its visible administration includes professing believers and their children, while its inward saving substance belongs to the elect. It is distinct from but founded upon the Covenant of Redemption. Christ earns the inheritance; grace gives it to those who receive him by faith.