The Social Democrat Party (Partido Social Democrata--PSD) emerged as the somewhat open and tolerated opposition under Caetano in the early 1970s. For a time, the PSD, then known as the Popular Democratic Party (Partido Popular Democrata--PPD), adopted the reformist political doctrines popular during the revolutionary period of the mid-1970s. It was soon overtaken, however, by the PS as the main opposition party, and it moved toward the democratic center. The radical constitution of 1976 was drafted and promulgated with its help, but even then the PSD was committed to its revision.

The PSD's fortunes generally improved as revolutionary fervor waned. In the earliest postrevolutionary elections, the PSD got about 24 to 27 percent of the vote, second to the PS. It had scored well in the conservative north of Portugal but not in the revolutionary south. As the party began to occupy the broad center of the political spectrum under the dynamic leadership of Francisco Sá Carneiro, the PSD's electoral support grew. In 1978 the PSD formed an electoral coalition, the Democratic Alliance (Aliança Democrática--AD), with two other parties and came to power in early 1980 with Sá Carneiro as prime minister. Since the formation of this government, the PSD remained in government throughout the 1980s and into the first half of the 1990s, either as part of a coalition, in a minority single-party cabinet, or as a majority single-party government.

The AD won the parliamentary election of October 1980, but the coalition's forward movement slowed somewhat after the death of Sá Carneiro in a plane crash in December 1980. His successor, Expresso founder and editor Francisco Pinto Balsemão, lacked Sá Carneiro's forcefulness and charisma. The party formed an electoral coalition with the PS in 1983, the Central Bloc, and was in government until 1985 when the coalition ended. For two years, the PSD formed a minority government with its new leader, Aníbal Cavaco Silva, as prime minister. In the 1987 national elections, the PSD won the Second Republic's first absolute parliamentary majority, a feat the party repeated in the 1991 elections. By consistently favoring free-market policies, the PSD benefited from Portugal's improved economy after the country joined the EC in 1986 and the electorate's return to a more conservative position after the radical politics of the mid1970s .

Data as of January 1993