Beresheet - which is equipped with cameras, magnetic sensors, and transmitters to relay data to and from to Earth - launched on Thursday inside the top of a Falcon 9 rocket in Cape Canaveral, Florida.
If the craft is landed successful, Israel will join China, Russia and the United States as the only countries to ever successfully land a craft on the moon.
Entrepreneurs, not government space agencies, financed the mission, which was initially projected at $10 million but eventually grew to $100 million. "It's the first time a small country has aimed to reach the moon and land safely".
The payload was launch on one of SpaceX's Falcon 9 rockets and the first stage of the rocket was previously used to launch the Iridium-7 mission in July of a year ago and the SAOCOM 1A mission in October.
Just after 34 minutes, the Israeli moon lander Beresheet, which is owned by a nonprofit called SpaceIL, was deployed to orbit.
SpaceIL said it hoped Beresheet would help inspire Israel's defence-focused space program to pursue more science missions by way of an "Apollo effect", referring to the manned lunar exploration program that became NASA's chief goal in the 1960s and early '70s.
If all goes according to plan for Beresheet, the lander will arrive on the near-side of the moon in mid-April following a two-month journey through 6.5 million km of space.
Once ejected from its vehicle, the spacecraft robot will then use its British-built engine to propel itself to the moon.
If successful, Beresheet will end up as the prototype for a series of future moon landing missions planned jointly by IAI and Germany's OHB System on behalf of the European Space Agency. What's even more unbelievable about SpaceIL is that all three of these nation-state operations that have made it to the moon so far have had enormous capital backing up their missions.
The launch was SpaceX's second of the year, following a January launch for low-Earth-orbit satellite operator Iridium. In addition to Kahn, Dr Miriam Adelson, an Israeli-American doctor and philanthropist, and her husband, casino magnate and investor Sheldon Adelson, contributed $US24 million to keep the lunar lander soaring.
Previous missions have reached the moon much faster.
SpaceIL co-founder Yonatan Weintraub told Fox News in a statement, "After more than eight years of working with brilliant engineers, we are finally ready to launch our spacecraft to the Moon!"
A decision to make the lunar hop won't be made until after the landing in April, but there's really nothing to gain from such a manoeuvre - one that could unnecessarily damage the probe.
Beresheet can not fly directly to the moon, SpaceIL officials have said.