The Socialist Party of America was formed in 1901 by a merger between the Social Democratic Party of Eugene V. Debs, formed three years earlier by veterans of the Pullman Strike of the American Railway Union, and a wing of the older Socialist Labor Party.

Prominent members included Helen Keller, Upton Sinclair, Carl Sandburg, and Jack London.

Before World War I, it elected two Members of Congress, over 70 mayors, and many state legislators and city councilors. Opposition to the war reduced its popularity, while its best-known member, Debs, was imprisoned on treason charges. In 1919 there was a major split, when some members split to form the Communist Labor Party, led by John Reed.

The Socialist Party did not run a presidential candidate in 1924, but joined the AFL and railroad brotherhoods in support of independent Sen. Robert M. La Follette of Wisconsin. In 1928, the Socialist Party revived as an independent electoral entity under the leadership of Norman Thomas, a founder of the American Civil Liberties Union.

The party's anti-war stance further weakened it during World War II, and it was hurt by the anti-Communist drives of the McCarthy era. In the succeeding decades, the party was rent by internal dissent.

In 1973 the Socialist Party of America was taken over by right-Shachtmanites and renamed the Social Democrats USA. Another faction spun off and formed the Socialist Party USA.