The UDP played a role in the loyalist cease-fire of 1994 and contested the 1996 elections to the Northern Ireland Forum, winning two seats entitling the party a place in the all-party talks that led to the 1998 Belfast Agreement. In January 1998 the UDP voluntarily withdrew from the peace talks before they were expelled in response to a number of murders committed by the Ulster Freedom Fighters.
The party officially supported the establishment of devolution for Northern Ireland and the creation of an assembly but in this they were at odds with the UDA and much of the party's membership. The UDP failed to win any seats at the 1998 elections for the assembly.
The disagreement over the Belfast Agreement between the UDP leadership and the UDA, and within the UDP itself continued until in November 2001 the party dissolved.