The origins of the league go back to the clandestine anti-Japanese resistance organization AFO that was founded by the Communist Party of Burma (CPB) led by Thakin Soe, the Burma National Army (BNA) led by Aung San, and three socialists from the People's Revolutionary Party (PRP), Kyaw Nyein, Thakin Chit, and Ba Swe in August 1944.

Personal issues led to Thakin Soe's ouster from the CPB and consequently to his absence at the first post-war conference of the AFPFL held at the Naythurain theater on the Kandawgyi Lake from 16 to 19 August 1945 in Rangoon.

[7] In January 1947, Aung San and other AFPFL leaders such as Thakin Mya, Tin Tut, and Kyaw Nyein negotiated in London the independence for Burma.

Aung San headed the constitutional assembly and was set to become Burma's prime minister, but was assassinated together with six other members of his cabinet on 19 July, a date commemorated as Martyrs' Day.

Burma declared independence from Britain in January 1948, and the CPB went underground the following March after U Nu ordered the arrest of its leaders for inciting rebellion.

By 1958, despite an economic recovery and the unexpected success of U Nu's "Arms for Democracy" offer that saw the surrender of a large number of insurgents, most notably the PVO, the AFPFL had become riven with internal splits, which worsened following the party's congress in January 1958.

[10] During its time in office, the AFPFL pursued a nationalist policy based on unity and consensus, upheld parliamentary democracy and presided over a mixed economy comprising both state and private enterprise.

It spent most of this period in its history fighting several communist, socialist and ethnic separatist rebel groups for control over the future of the country.