The first Liberal Party of Japan was formed on October 18, 1881, by Itagaki Taisuke and other members of the Freedom and People's Rights Movement (League for the Establishment of a National Assembly) to agitate for the establishment of a national assembly, with a membership based on the ideals of liberal democracy under a constitutional monarchy.
Other notable members included Gotō Shōjirō, Baba Tatsui, Tetchō Suehiro, Ueki Emori, and Nakae Chōmin.
The Meiji government viewed the growth of the Jiyūtō with misgivings, suspecting it of harboring tendencies towards republicanism.
The party was also made vulnerable due to peasant uprisings in rural areas led or inspired by local Jiyūtō members.
In 1887, Gotō Shojirō regrouped some members of the former Jiyūtō into a proto-party called the Daidō Danketsu Movement.