The party evolved from the League of Communists of Croatia (Savez Komunista Hrvatske, SKH). Its delegation left the 17th congress of the Communist Parties of Yugoslavia together with the Slovenians due to inability to cooperate with the Serbian Communist Party led by Slobodan Milošević. The Communism was abolished in Yugoslavia shortly thereafter, and so the party added Party of Democratic Changes (Stranka demokratskih promjena, SDP) to its name and participated in the multi-party elections of April 1990. SKH-SDP lost those elections but remained in parliamentary opposition.
On April 30, 1994 they merged with the Social Democrats of Croatia (SDH), led by Antun Vujić, to form the Social Democratic Party of Croatia (conveniently abbreviated to "SDP"). Ivica Račan remained the party's president.
The party formed a pre-election coalition with the Croatian Social Liberal Party (HSLS) and proceeded to win the January 3, 2000 parliamentary elections. Račan, as the leader of the strongest party, became the prime minister of Croatia. The coalition government included ministers from SDP and HSLS, plus the coalition of Croatian Peasants Party, the Liberal Party, Croatian People's Party, and the Istrian Democratic Assembly.
The SDP-led government, though with several changes, remained in power until the next elections of November 23rd, 2003. They formed pre-election coalitions with Libra (a dissenting faction of HSLS) and the Liberal Party, but failed to secure a new parliamentary majority, even with the extended coalition of 2000.
See also: Politics of Croatia, List of political parties in CroatiaHistory