Most of the members of the Partido Obrero were also leading figures in the labor movement, including PKP founders Crisanto Evangelista, Antonino Ora, Jacinto Manahan, and Domingo Ponce.

In 1928, conservative elements of the Congreso Obrero de Filipinas (COF) were alarmed by the increasing radicalization of Evangelista and his group, and took advantage of their absence by calling a national convention on May 1 of that year.

In the previous year, the Partido Obrero almost received official backing from the COF, the resolution only being shot down by a single vote.

[7] The next year, Evangelista and his group submitted a draft thesis which called for measures such as the adoption of a collective leadership, establishment of a workers' party, the promotion of class struggle, and so on.

The thesis was allowed to pass to the May convention, where the conservative group allegedly used dummy labor delegates to ensure that the radical measure was blocked.

Twelve days later on May 12, 1929, a new labor federation known as the Katipunan ng mga Anakpawis sa Pilipinas (KAP) was formed, consisting of 27 of the 35 unions of the COF.

The PKP launched an aggressive organizational and propaganda drive among the peasants of Central Luzon and Manila, holding public meetings almost daily.

[7] In January 1931, the PKP opened its national headquarters in Quiapo, Manila, and also launched its official organ, the Titis (Spark), reminiscent of Lenin's Iskra.

Evangelista instead raised his clenched fist and began an incendiary speech, and said:[7] Comrades or brethren, the municipal president, Mr. Aquino, has allowed us to hold the parade, but for reasons unknown to me the permit has been revoked.

Based on these events, the Manila Court of First Instance, on September 14, 1931, passed a decision declaring both the PKP and KAP as illegal organizations, and sentencing twenty communist leaders of eight years and one day of banishment to the provinces.

[9] The American administration in the Philippines acknowledged and recognized that the convicted communists such as Evangelista, Manahan, Capadocia, and Balgos were leaders in their trades and their cooperation would have been most beneficial.

This, combined with Quezon assuming the presidency of the Commonwealth with his liberalism and genuine desire to garner the support of labor groups, allowed for an opening in rapprochement between him and Evangelista.

In 1936, James S. Allen, a high-ranking official of the CPUSA came to the Philippines to persuade Evangelista's group of accepting even a conditional pardon, under the argument that a united front must be maintained against world fascism.

Allen then mediated between Pedro Abad Santos' Partido Sosyalista ng Pilipinas (PSP) and Crisanto Evangelista's PKP to form a merger, despite their ideological differences.

Two years later, together with his assistants Agapito del Rosario, Luis Taruc, Lino Dizon and others, he organized the Aguman ding Talapagobra ning Pilipinas (ATP) into the Aguman ding Maldang Talapagobra (AMT), similar to the general workers' unions in Spain, Mexico, and France, which advocated the expropriation of landed estates and friar lands, farmers' cooperative stores and the upliftment of peasants' living conditions.

On October 18, 1950, the entire secretariat of the Central Committee of the PKP was arrested, including General Secretary José Lava, following the earlier capture of the Politburo in Manila[12]: 90  (and would remain in prison for the next two decades).

[12]: 95  By the end of 1954, the armed struggle was effectively over, although it took a few more years to die out, after which the PKP pursued a course of peaceful (legal and illegal) action.

According to historian Joseph Scalice, the PKP, in its alliance with the Marcos administration, was responsible for more communist deaths "in the wake of the declaration of martial law than were killed by the dictatorship", due mostly in part by a growing youth faction in the party called the Marxist-Leninist Group (MLG) opposing the imposition of martial law and attempting to splinter from the PKP.