The party was founded as the International Labour Association of Denmark on 15 October 1871 by Louis Pio, Harald Brix and Paul Geleff.

The industrialisation of Denmark had begun in the mid-19th century and a period of rapid urbanisation had led to an emerging class of urban workers.

The social-democratic movement emerged from the desire to give this group political rights and representation in the Folketing, the Danish parliament.

The stated policy was as follows: The Danish Social Democratic Labour Party works in its national form, but is convinced of the international nature of the labour movement and ready to sacrifice everything and fulfill all obligations to provide: Freedom, equality and brotherhood among all nations.In 1884, the party had their first two members of parliament elected, namely Peter Thygesen Holm and Chresten Hørdum.

In the 1924 Danish Folketing election, the party won the majority with 36.6 percent of the vote and its first government was put in place with Thorvald Stauning as Prime Minister.

Stauning stayed in power until his death in 1942, with his party laying the foundations for the Danish welfare state based on a close collaboration between labor unions and the government.

[22] The settlement was named after Stauning's apartment in Kanslergade in Copenhagen and included extensive agricultural subsidies and reforms of the legislation and administration in the social sector.

Social Democrats-led coalition governments (the I, II, III and IV Cabinets of Poul Nyrup Rasmussen) implemented the system known as flexicurity (flexibility and social security), mixing strong Scandinavian unemployment benefits with deregulated employment laws, making it easier for employers to fire and rehire people in order to encourage economic growth and reduce unemployment.

[26][19] The Cabinets of Poul Nyrup Rasmussen maintained a parliamentary majority during the period from 1993 to 2001 by virtue of their support from the Socialist People's Party and the Red–Green Alliance.

[35] Under Frederiksen, the Social Democrats voted in favor of a law allowing Danish authorities to confiscate money, jewellery and other valuable items refugees crossing the border may have as long as those valuables have no sentimental value,[36] despite harsh condemnation from the United Nations Human Right Council[37] and widespread comparisons between the plan and the treatment of Jews in Nazi-occupied Europe.

[39] Similarly, the Social Democrats voted for a law banning wearing of burqas and niqabs, while abstaining during a vote on a law on mandatory handshakes irrespective of religious sentiment at citizenship ceremonies and on a plan to house criminal asylum seekers on an island used for researching contagious animal diseases.

Frederiksen has also backed the right-wing populist Danish People's Party in their paradigm shift push to make repatriation rather than social integration the goal of asylum policy.

Labeling foreign policies of Europe as too economic liberal, Frederiksen has criticised other social democratic parties for losing their voters' trust by failing to prevent globalisation chipping away at labour rights, increasing inequality and exposing them to uncontrolled immigration.

With the result beyond doubt on election night, Rasmussen conceded defeat and Frederiksen has been commissioned by Queen Margrethe II to lead the negotiations to form a new government.

In the political program, these values are described as being consistent with a focus on solidarity with the poorest and social welfare to those who need it, with individual responsibility in relation to other members in society and with an increased involvement in the European Union project.

[47] As well as adopting more left-leaning economics, the party has become increasingly sceptical of mass immigration from a left-wing perspective in the late 2010s.

The party believes that immigration has had negative impacts for much of the population, a more pressing issue since at least 2001 after the 11 September attacks which intensified during the 2015 European migrant crisis.

[12][13] In a biography written before becoming the prime minister in 2019, Mette Frederiksen wrote: "For me, it is becoming increasingly clear that the price of unregulated globalisation, mass immigration and the free movement of labour is paid for by the lower classes.

Since then, Social Democrats have been supporting strict controls of immigration, arguing that it is integral to "a new class struggle" as it protects the national culture, rural communities and the working-class identities of Denmark.

Social Democrats also adopted a more conservative stance on cultural diversity, supporting repatriation rather than integration, postulating a ban on burqas and niqabs, and voting in favour of a law allowing Danish authorities to confiscate valuable items from refugees crossing the border.

[53] Ida Auken was originally elected as a member of the Socialist People's Party, but switched to the Social Democrats on 29 January 2021.

Prominent members previously leading Frit Forum include prime minister Poul Nyrup Rasmussen and other leaders of the Social Democrats Mogens Lykketoft and Svend Auken.