Led by multi-instrumentalist and ethnomusicologist Henry Sapoznik, Kapelye took a very serious approach to the traditional klezmer music of the Eastern European Jews. One of the first of the klezmer revival bands to record, Kapelye took a broad view of klezmer, mixing folk ballads, labor and political anthems as well as songs from the Yiddish Theater.
Sapozink was still a member of the string band called the Delaware Water Gap Band when he began to assemble the musicians to perform at a lecture of klezmer music at Temple Beth-El in Providence, RI in 1979. These musicians included pianist/vocalist Josh Waletzsky, who had previously recruited Sapoznik to help with the music of a film titled Image Before My Eyes about Jewish life in Poland between World War One and World War Two. Several other members of the group, including Michael Alpert (second fiddle, vocals) and Lauren Brody (vocals, accordion, piano) had been active in the Balkan music community. After Woody Allen and Pete Sokolow each turned down offers to play clarinet with the band, Ken Maltz accepted the position.
Kapelye performed on the soundtracks of such movies as The Chosen, which was adopted in 1981 from Chaim Potok's novel, and Israeli Menahem Golan's 1984 film, Over The Brooklyn Bridge, starring Elliot Gould, Shelly Winters, Sid Caesar, Margaux Hemingway and Carol Kane.