The party was created in December 1905 through the transformation of the Revolutionary Ukrainian Party (RUP). The USDLP program provided for the creation of a democratic republic with broad civil liberties and the right of nations to cultural and political self-determination, the confiscation of large land property and its transfer to local democratic autonomies. Members of the USDLP advocated a national organization of socialist parties with the possibility of conducting an independent policy within Ukraine, which caused disagreements with the Russian Social Democrats (RSDLP). The USDLP experienced constant repression and persecution and practically did not function during World War I.

After the February Revolution of 1917, the Party quickly gained political weight. In March 1917, it played a leading role in the formation of the Ukrainian Central Rada with the USDLP leader Vladimir Vinnichenko becoming Deputy Chairman. In April, the 1st All-Party Conference advocated the creation of Ukrainian autonomy but opposed raising the issue of Ukraine’s full independence. The USDLP reserved the right to make a final decision on the agrarian issue to the future All-Russian Constituent Assembly. Party members participated in the negotiations of the Central Rada with the Provisional Government.