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Since its foundation in 1889, the Social Democratic Party has often been one of the main political forces in Austria. At the start of the First World War it was the strongest party in parliament, and on the ending of that war in 1918 the party leader Karl Renner became chancellor of the First Republic. The party lost power in 1920, but retained a strong base of support in the capital Vienna. A period of rising political violence culminated in the banning of the Social Democratic Party under the Austrofascist dictatorship (1934–38).
In 1918, the Socialists supported union with Germany, but the Allies forbid this in the treaty of St. Germain. When the Nazis took power in Germany the Socialists changed their view on the Anschluss, which took place in 1938 and brought Austria into the Second World War. In 1945 the party was reconstituted as the "Socialist Party of Austria" (Sozialistische Partei Österreichs, SPÖ), led by Adolf Schärf. The party entered the government of the Second Republic as part of a grand coalition with the People's Party (ÖVP) until 1966, Renner becoming the Republic's first president.
From 1971 to 1983, under Bruno Kreisky, the Socialist Party was the sole governing party. For the following three years it ruled in coalition with the Freedom Party (FPÖ), then up to 2000 it was again part of a grand coalition with the ÖVP, with Franz Vranitzky as Chancellor until 1997. In 1991 it reverted to including "Democratic" in its name, becoming the "Social Democratic Party of Austria" (Sozialdemokratische Partei Österreichs).
During this period, the grand coalition combined with the "Proporz" system – whereby important posts throughout the government were shared out between members of the two main parties – evoked rising discontent. This was a factor in the growing popularity of the FPÖ, which came second to the SPÖ in elections in 1999. The following year the FPÖ and ÖVP formed a rightwing coalition, displacing the Social Democrats from a share in government. While this coalition was still in power, the Social Democrat Heinz Fischer was elected president in 2004. Following the 2006 elections another grand coalition was formed between the SPÖ and ÖVP, this lasting until 2017.