The party was founded as a national trade union center, the Indonesian Labour Front (Barisan Buruh Indonesia, BBI), on 15 September 1945.

A group that wanted to concentrate on trade unionism left the party, and refounded the BBI on 31 December 1945.

A new pro-government coalition, Sajap Kiri, was founded to support the Linggadjati Agreement with the Dutch government.

In the coming month, Sajap Kiri evolved into the People's Democratic Front, with PBI as one of its constituents.

Trimurti (the first Indonesian Minister of Labour, serving in Amir Sjarifuddin's cabinet 1947-1948), who was also a member of the PBI Executive.