The mosque was founded in early 1960 on a hilltop surrounded by vegetable farms along Choa Chu Kang Road. It was originally named Masjid Jamek but in 1963 renamed as Masjid AlKhair. In 1997, the mosque was one of the few kampung mosques in Singapore that provided religious and social services to the Muslim residents in Bukit Panjang, Teck Whye and Choa Chu Kang estates.
Because of its small size, cramped offices and rooms for religious classes, the mosque then can only accommodate a limited number of students and congregation at any one time. Also when it rained heavily, parts of the zinc roof leaked and caused many areas unusable. It was then listed as the first mosque to be redeveloped under the third phase of the Mosque Building Fund (MBF) scheme. A new location at 1 Teck Whye Crescent was selected and within two years, the current mosque was completed and resumed its services.