The PLM was founded by Luis Napoleón Morones, one of Mexico's main union leaders.

The PLM functioned as the political branch of the Regional Confederation of Mexican Workers (CROM), the country's most powerful union.

Presidents Álvaro Obregón (1920–1924) and Plutarco Elías Calles (1924–1928) were elected on a PL ticket and in 1922 the PL managed to defeat the Liberal Constitutionalist Party in congressional elections, becoming largest party in the Congress of Mexico.

After the assassination of Obregón, who was recently elected, in 1928 the party's power started to decline.

No longer endorsed by the Mexican political elite, the Laborist Party fell into irrelevance.