The party was founded on 11 January 1989 in the Cankar Hall in Ljubljana, and Dimitrij Rupel was elected as its president. It was one of the first political party established in opposition to the Communist regime. It was founded mostly by intellectuals around the alternative journal Nova revija and it was initially called Slovenian Democratic Union of Reason.
After the independence of Slovenia, the party split into two. Its left liberal wing, led by the president Dimitrij Rupel, founded the Democratic Party, while the conservative wing, led by the minister of justice Rajko Pirnat established the centre-right National Democratic Party. In the election of 1992, both parties suffered a defeat. The Democratic Party gained 5,01% of the popular vote, and in 1994, most of its members joined the Liberal Democracy of Slovenia. The National Democratic Party obtained 2,18% of the vote and no seats in Parliament. In 1993, the National Democrats joined the Slovene Christian Democrats, and in 1995 they switched to the Slovenian Social Democratic Party.
Despite its relatively small popular support, the Slovenian Democratic Union was one of the most influential parties in Slovenia between 1988 and 1991. After its dissolution, its former members have become influential members of other political formations.
The legal successors of the Slovenian Democratic Union are the Slovenian Democratic Party and the Liberal Democracy of Slovenia.
