The organization was founded by labor leaders and former members of the Socialist Party of America who had established themselves as the Social Democratic Federation (SDF).

In his 1944 memoir, Waldman wrote:Back from Detroit, I was immediately confronted with a problem which involved millions of dollars of property controlled by subsidiaries of the Socialist Party.

There was The New Leader, a weekly newspaper published in English; there was the Rand School of Social Science, which, together with Camp Tamiment, had enormous property value, not to speak of their importance as propaganda and educational instruments.

[3] Max Zaritsky, a union president, suggested forming a political party from the Labor's Non-Partisan League of the Congress of Industrial Organizations to David Dubinsky and Sidney Hillman.

Zaritsky, Hillman, Dubinsky, Luigi Antonini and Isidore Nagler of the International Ladies Garment Workers Union, Louis Hollander of the Amalgamated Clothing Workers of America, Baruch Charney Vladeck and Alexander Kahn of The Forward, and Louis Waldman of the SDF met at the Brevoort Hotel to discuss the plan.

The ALP found itself $50,000 in debt at the end of the 1936 campaign, but substantial contributions from labor groups erased the red ink.

[13] Party decision-making in the first year was handled by ILGWU executive secretary Fred Umhey, the Amalgamated Clothing Workers Union's Jacob Potofsky, and Alex Rose of the Milliners'.

[11] The party supported Fiorello La Guardia during the 1937 New York City mayoral election and he received 482,790, 21.6% of the popular vote, on their ballot line.

This debate was one of the major issues in the party's county committee elections in 1943, and the left-wing gained control over the Bronx affiliate.

La Guardia proposed a compromise in which the state executive committee would be divided between the factions and no communist would be on the election slate.

[19] The Liberal Party of New York was formed in opposition to the ALP by Paul Blanshard, August Claessens, Harry W. Laidler, and others.

The party lost two state legislators in the 1948 election, but Marcantonio was able to win reelection solely on the American Labor ballot line.

[21] In 1941, American Laborite Joseph V. O'Leary was appointed New York State Comptroller by Governor Herbert H. Lehman both to recognize the ALP's previous and to maintain the party's future support.

"[22] With this move, the CIO's largest labor federation, consisting of approximately 200 locals and 600,000 members, was formally connected to the ALP.

[28] The CIO called for all of its ALP-affiliated unions to disaffiliate and ACWA withdrew its support of the ALP after the party endorsed Wallace for president.

He resigned as chair and left the party in November 1953, due to disputes with Communist leaders who he claimed were no longer interested in third-party politics.