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In April 1992, the struggle for power inside the National Salvation Front (FSN) between the more hard-line group led by Ion Iliescu and the more reformist group led by Petre Roman resulted in the Iliescu group withdrawing from FSN and founding Frontul Democrat al Salvarii Nationale (FDSN -- Democratic National Salvation Front), which would later become the present-day PSD.

FDSN won the 1992 elections and went on to govern Romania until 1996. In July 1993 they took the name Party of Social Democracy in Romania (PDSR - Partidul Democratiei Sociale din România). From 1993 to 1995 they became infamous for governing in coalition with three extremist parties - the right-wing Romanian National Unity Party (PUNR) and Greater Romania Party (PRM), and the left-wing Socialist Workers' Party. They lost the 1996 election to the Romanian Democratic Convention .

In November 2000 they were back in power, this time in a coalition named the Social Democratic Pole of Romania with the Romanian Social Democratic Party (PSDR) and the Romanian Humanist Party (PUR). PSDR merged with PDSR in January 2001, and the resulting party took its present name, PSD.

PSD has been often criticised for harbouring former Communist officials and for attempting to control the Romanian mass media.

See also: Politics of Romania, List of political parties in Romania.