It was founded in 1916, as the political representation of the trade unions of Iceland.

[3] In 1920, its first member of the Althing, the Icelandic parliament, Jón Baldvinsson was elected.

[5] The party led the government of Iceland three times, first in 1947–1949 under Stefán Jóhann Stefánsson, then in 1958–1959 under Emil Jónsson and finally under Benedikt Sigurðsson Gröndal in 1979–1980.

The People's Party was succeeded in 2000 by the Social Democratic Alliance, a centre-left party with a wider political base created by the merger of the Social Democratic Party with the National Awakening, the People's Alliance and the Women's List.

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