The station signed on April 6, 1981 as WFTI-TV. The station was initially owned by Family Television, Inc., founded by Keith Houser in 1979, and headquartered in the Poughkeepsie Plaza Mall on U.S. Route 9 in the city of Poughkeepsie. WFTI's early programming including reruns of The Lone Ranger and The Cisco Kid, and the station originated coverage of Army Cadets sports (except the Army-Navy college football game); Family TV also produced Valley Magazine a nightly 30 minute program with interviews of local celebrities, such as James Cagney.
After Irving Trust, the station's sole banking source, experienced financial problems and prematurely called the station's loan in 1982 (Irving Trust was ultimately shut down by the Federal Reserve), Family Television sold the station to the Trinity Broadcasting Network in June 1982, though the sale would not be completed until over a year later, in July 1983. TBN then changed the station's call letters to the present WTBY and moved the station's operations to studios in the village of Fishkill.
While Poughkeepsie is part of the New York City television market, WTBY's over-the-air signal can only be seen clearly in the northern fringes of the area. Most of the core of the New York area gets only a rimshot signal even in digital, and it completely misses Staten Island and most of Long Island. For most of its first quarter-century as a TBN-owned station, the bulk of its viewership was in the Albany/Schenectady/Troy market. Until 2010, WTBY operated two translators in that market - W52DF channel 52 to reach Albany and the Capital District, and W47CM on channel 47 to reach Glens Falls and the Adirondacks. Both stations ceased broadcasting due to declining support, which has been attributed to the digital transition, with W52DF shutting down on March 13 and W47CM shutting down one month later. W52DF's license, along with 43 other silent TBN repeaters, was canceled on December 1, 2011 for remaining silent over a year.
Until 2007, it was not carried on the two main cable systems in New York City itself (Cablevision and Time Warner Cable), and its cable penetration is still spotty at best on the New Jersey and Connecticut sides of the market. It is not available on DirecTV or Dish Network's New York City local feeds; only the national version is available.
Despite its modest cable penetration in the area, TBN has poured significant resources into WTBY in recent years. In 2007, when TBN opened a new studio in the former Century Center for the Performing Arts near Union Square in Manhattan, WTBY's studio/office operations were moved to that location.
Locally produced programs include versions of TBN's flagship program Praise the Lord and Joy in Our Town, a public affairs program. WTBY also carries programs produced by local pastors, notably A.R. Bernard of Christian Cultural Center, and Floyd H. Flake of the Greater Allen A. M. E. Cathedral of New York.
WTBY-TV elected to keep RF channel 27 permanently for digital operation during the first round of digital channel elections in February 2005. The station discontinued regular programming on its analog signal, over UHF channel 54, on October 1, 2008. The station's digital signal remained on its pre-transition UHF channel 27, using PSIP to display WTBY-TV's virtual channel as 54 on digital television receivers, which was among the high band UHF channels (52-69) that were removed from broadcasting use as a result of the transition.
The shutdown initially caused the station to be dropped from Service Electric's systems in New Jersey due to difficulty in receiving the signal at the cable headend. Service Electric replaced it with the national TBN service.