The party was founded in early 1991 by ethnic Serb politicians opposed to the radical and secessionist policies of Republic of Serbian Krajina.

Its base was limited to the territories under Croatian government control, where ethnic Serbs were increasingly subjected to a variety of abuses, often under tacit or open support by authorities.

In return, the state-controlled media described the SNS as the only legitimate representative of Croatian Serbs and its leader Milan Đukić was appointed to many important government posts, including assistant minister of interiors, vice-speaker of Sabor and presidential advisor.

[citation needed] The rivalry between the SNS and SDSS gradually manifested itself on the former Krajina territories where those two parties fought for the votes of Serb refugees who returned to Croatia.

Although the SNS had the upper hand at first and came into position to form the first Serb-dominated local government in Donji Lapac, SDSS proved not only as better organised, but also more acceptable for Croatian political mainstream.