The Communist Party of Germany (in German, Kommunistische Partei Deutschlands – KPD) was formed in a split within the Independent Social Democratic Party of Germany after the end of World War I, and was led by Rosa Luxemburg and Karl Liebknecht, who were both murdered in January 1919. Other prominent members included Leo Jogiches, Clara Zetkin, Paul Levi, Franz Mehring and Ernst Meyer.
In its first period the KPD was a small party in which large sections of the membership held views which were opposed by the leadership around Rosa Luxemburg. These elements soon left to form their own Communist Workers Party and Luxemburg was murdered soon after. This left the party in the hands of Karl Levi who sought to win over social democratic workers. These efforts were rewarded when a substantial section of the Independent Social Democratic Party joined the KPD making it a mass party for the first time.
However the leadership was never stable and Levi was expelled by the Comintern for indiscipline despite Lenin's argument that his position was correct. Further leadership changes took place in the early 1920s until after 1923 a leadership was installed loyal to the rising Stalin faction in Russia. In 1928 this leadership headed by Ernst Thälmann supported the so called Third Period conception that the Social Democrats were a greater enemy than the National Socialists or Nazis.
In the Weimar republic era, the KPD pursued on direction from Moscow the disastrous policy of concentrating on the Social Democrats first, assuming that this would lead to a Nazi regime that would soon collapse and be replaced with socialism. During this period they maintained a solid electoral performance, gaining 100 deputies in the November 1932 elections. In the presidential election in 1932, Thälmann took 13.2% of the vote, compared to 30.1% that Hitler got.
Soon after the appointment of Hitler as Chancellor, the Reichstag was set fire to. This was blamed by the Nazis on Communist agitators, and used as a pretext to introduce laws enabling suppression of political parties, and the KPD was wound up.
During World War II, many German Communists ended up dead (Ernst Thälmann, Werner Seelenbinder), in exile (Walter Ulbricht), or were imprisoned (Erich Honecker).
In East Germany, the party was forced to merge after World War II with the Social Democratic Party of Germany to form the Socialist Unity Party (SED).
In West Germany, the party was banned in 1956 by the Federal Constitutional Court of Germany. It was later legalised as the German Communist Party (DKP) which still exists.