The People's Alliance was founded in 1994 after Chandrika Kumaratunga succeeded her mother, former prime minister Sirimavo Bandaranaike, as the leader of the SLFP.

The alliance was formed as a coalition consisting of the SLFP and other smaller leftist parties.

The alliance won its first elections, the 1994 parliamentary elections, in a landslide victory, defeating their main opposition the United National Party and bringing a decisive end to 17 years of UNP rule.

However, the alliance was defeated by the UNP-led United National Front in the 2001 parliamentary elections.

The CPSL and LSSP threatened to reform the PA as a separate front, however, such alliance was never formed.