A short time after its foundation, the PRD profited from the dissolution of the Portuguese parliament, occupied at the time by a grand coalition between the Socialist Party (PS) and the Social Democratic Party (PSD), from both of which the PRD included dissidents (for example, on the PS side, José Medeiros Ferreira, former foreign Minister in a Mário Soares government and also a supporter of the centre-right Democratic Alliance as a dissident of the PS, and on the Social Democratic side, Joaquim Magalhães Mota, a co-founder of the PSD).

Due to a disastrous economic policy, Ramalho Eanes dissolved the parliament and called for a new election where the newly founded PRD surprisingly won 18% of the vote and got 45 MPs, becoming the third major party.

In 1987, the party made a decision that would lead to its dissolution, supporting a censure motion, along with the Communists and the Socialists, that led to the fall of the first government of Aníbal Cavaco Silva, which took office after the legislative elections of 1985.

In the legislative election of 1991, the party, at the time led by Canavarro, lost all of its parliamentary representation and never regained it, nor reached its previous position.

Canavarro left the leadership of the party and was replaced by Manuel Vargas Loureiro, who led it until its de facto extinction.