In 1863 the Church of St. Teresa's was established. The patroness of the parish is Teresa of Avila; The child of Jewish converts, Teresa was born in Spain in 1515. Teresa lived in turbulent times; the New World had been discovered by Columbus; the Protestant Reformation was raging in Germany. Teresa grew up in a world where women essentially had two options; marriage or the convent. Teresa, an independent minded woman, entered the Carmelite Convent of the Incarnation in 1536. There were many other independently-minded women there; the way of life, though poor, was also very relaxed. Guests entered and left freely, and nuns left the enclosure on home visits. Teresa's early years in the convent were not positive; she grew ill, and the years between 1543 and 1555 were years of spiritual desolation. In 1555 she experienced a spiritual conversion, and sought to reform her Carmelite order by returning to a stricter observance of their Rule of life. She encountered fierce opposition, but in 1562 opened the new Carmelite convent of St. Joseph's with four other like-minded sisters. She continued to experience opposition from both the female and male branches of her order. They suspected her of being a charlatan, especially as rumors of her sanctity grew. She died on October 4, 1582, was canonized in 1622, and in 1970 she was made a Doctor of the Church, in recognition of her contributions to mystical theology and Christian spirituality. Devotion to her was widespread in Europe, including Ireland, and no doubt this contributed to her being named as the patroness of this new church established on the lower east side of Manhattan.

Throughout its history, St Teresa's has reflected the character of its neighborhood. At first it was a parish of Irish immigrants, who only had to walk the few blocks from the piers on the East River to find help and support from the parish. Societies such as the Society of St. Vincent de Paul were active in the parish, ministering to the poor Irish immigrants who quickly settled in the tenements that were being built everywhere. The neighborhood would soon see wave after wave of immigrants; Germans, and Slavs, in the 20th century, Latinos and most recently, Asians. The mix of cultures and languages gives to St. Teresa's a multi-cultural flavor, with mass being celebrated every Sunday in English, Chinese and Spanish.

Soon after the establishment of the parish in 1863, its first pastor, Father James Boyce turned his attention to one of the most pressing needs of his generation: the education of Catholic children. The 19th century was a turbulent time for public education. The secular school system had not yet been established. Religious education was a part of school life for all children, and Catholic parents feared that their children were being proselytized by Protestant educators. As a result, the Catholic Church in the U.S. moved quickly to establish parochial schools. Father Boyce established boys' schools in 1865 and 1867, and then in 1872, invited the Ursuline Sisters to staff a private girls' school, the Ursuline Convent and Academy. While the parochial school established by Father Boyce continued until 1940, the girls' academy lasted until 1901, and the Ursuline Sisters left in 1911. For more information about the Ursulines in New York, go to www.osueast.org. They were followed by many other religious communities, such as the Sisters of Charity of St. Vincent de Paul, of Riverdale, New York www.scny.org and the Sisters of the Presentation of the Blessed Virgin Mary, (www.presentationsisters.org), who served in the school from 1939 until the school was closed in 1942 due to structural problems with the buildings. The Presentation Sisters returned to the parish in 1966 and remained active in the parish until 1999, providing a variety of pastoral services. They were assisted in their efforts by other communities, including the Cenacle Sisters, www.cenaclesisters.org, the Maryknoll Sisters, www.home.maryknoll.org/maryknoll, the Hastings Franciscans, the Missionary Servants of the Most Blessed Trinity www.msbt.org, and the Sisters of Our Lady of Christian Doctrine, www.sistersrcd.org.

St. Teresa's had always been a poor parish, worshiping in an old building for which there had never been sufficient funds for proper maintenance. As a result, in 1995 the interior vaulted ceiling of the church collapsed, and 60,000 pounds of plaster fell, breaking through the floor into the basement parish hall. The congregation worshiped for months in a local synagogue, but eventually found the money to repair the floor so that they could worship in the church albeit in the basement. The future looked bleak. There was no money to repair the main church, and many argued that St. Teresa's should be closed. However, the pastor at the time, Father Dennis Sullivan, and his parishioners were determined that St. Teresa's would not close. After the school had been condemned and closed in 1942, it had been torn down and eventually become a parking lot, used by the church and neighborhood residents. The late 1990s were a time of rising property values, as New York City began to revitalize and the Lower East Side began to gentrify. Thus through the sale of the parking lot and adjacent air rights, the parish began extensive renovation of the church, including a new roof, new interior appointments salvaged from what was left from the old, and as the crowning glory of the church the restoration of three murals painted in the 1880s, depicting St. Patrick teaching the pagan kings of Ireland, St. Teresa's teaching her sisters and the crucifixion. The church was reopened in the early winter of 2002 and solemnly rededicated by His Eminence Edward Cardinal Egan in early 2003. Father Dennis Sullivan left St. Teresa's in July 2003 and  the current pastor is Fr. Alexis Bastidas.