ND was founded in July 1974, two months after Constantine Karamanlis was sworn in as the first Prime Minister in the post-dictatorship era in Greece. Karamanlis had been Prime Minister twice before. In the first free elections of the new era, ND won by a landslide, securing 54.4% of the vote.
Caramanlis intended ND to be a more modern and progressive conservative party than those which had ruled Greece before the 1967 military coup. The party's ideology was defined as "radical liberalism," a term defined by ND as "the prevalence of free market rules with the decisive intervention of the state in favour of social justice."
Under ND leadership Greece joined the European Union in 1981. In 1977, ND again won national elections. Under Karamanlis Greece redefined its relations with NATO, and tried to resolve the Cyprus following the Turkish invasion. In 1980, however, Karamanlis retired. His successor, George Rallis, was defeated at the following elections by the Panhellenic Socialist Movement led by Andreas Papandreou.
ND returned to power in a minority government under Konstantinos Mitsotakis in 1989, and a year later it formed a majority government after new elections. But this was ND's last success to date. It was defeated in 1993 under Mitsotakis, in 1996 under Miltiades Evert, and in 2000 under Costas Caramanlis, nephew of the party's founder. In 2000 ND lost by the smallest margin in modern Greek history.
By 2003, however, ND was consistently leading the PASOK government of Costas Simitis in opinion polls. In January 2004 Simitis resigned and announced elections for March 7, at which Caramanlis would face the new PASOK leader, George Papandreou.