Rainbow Labour began as a branch within Chris Carter's Auckland Waipareira electorate on 17 March 1997 following his narrow defeat in the election the previous year.

[citation needed] That same year, Tim Barnett, newly elected to Parliament as an openly gay man, established a Rainbow Special Branch in Christchurch on 3 October 1997.

[citation needed] This led to the formation of a Rainbow Sector within the Labour Party, which gave the branches a nationwide focus and co-ordinating body.

[citation needed] Issues Rainbow Labour has advanced within the Labour Party have included relationship property reform, human rights reforms, the Civil Union Act, which was passed in 2004, and the Marriage (Definition of Marriage) Amendment Bill which passed in April 2013 and was brought to Parliament via a Members Bill under Louisa Wall's name.

[citation needed] On 15 February 2022, the Conversion Practices Prohibition Legislation Bill passed its third and final reading.