The party was founded on 12 October 1991, on the basis of the Popular Front of Estonia after several parties had split from it. The party's chairman is Edgar Savisaar. Vice chairmen of the party are Mailis Reps and Enn Eesmaa.
The party claims that its goal is the formation of a strong middle class in Estonia. Keskerakond declares itself as "middle class liberal party". It supports small enterprises.
In general elections in March 1995, CPE placed third with 14.2% of votes and 16 seats. It entered the coalition, Savisaar taking the position of the Minister of Internal Affairs, and Peeter Kreitzberg that of the Minister of Education. After the "tape scandal" (secret taping of talks with other politicians) where Savisaar was involved, the party was forced to go to opposition. A new party was formed by those who were disappointed by their leader's behaviour. The Centre Party was left in nearby political isolation until 2001.
In the general elections in March 1999, Keskerakond, whose main slogan was progressive income tax, gained 23.4% of votes (the first result) and 28 seats in the Riigikogu. CPE members are active in its 26 branches - eight of them are promoting the centrist values in Tallinn, 18 in towns and counties.
The Centre Party applied twice for the Liberal International membership, but was rejected They succeeded on the third attempt.
In 2001, Kreitzberg ran for the presidency of Estonia.
In January 2002, Keskerakond and the Reform Party formed a new governmental coalition where Mikser was the Minister of Defense. The coalition stayed until the new elections in 2003, in which the party won 28 seats. Though the Centre Party won the greatest percent of votes, it was in opposition until March, 2005 when Juhan Parts' government collapsed.
In 2003, the majority of the party's assembly did not support Estonia's joining the European Union (EU). Savisaar did not express clearly his position.
A number of Keskerakond members left the party in fall 2004, mostly due to objections with Savisaar's autocratic tendencies and the party's anti-EU stance, forming the Social Liberal group. Some of them joined the Social Democratic Party, others the Reform Party and others the People's Party. One of these MPs later rejoined Keskerakond. Keskerakond is affiliated with the European Liberal Democrat and Reform Party since May 2004.
Keskerakond participated in government with the Estonian Reform Party and the People's Union of Estonia from 12 April, 2005 until a new government took office after the March 2007 elections. They had 19 members in parliament and 5 minister portfolios.
Local elections on 16 October, 2005 were very successful to the Centre Party. Keskerakond managed to win 32 seats out of 63 in Tallinn City Council, having now an absolute majority in that municipality. One of the factors behind this success in Tallinn was probably the immense popularity of Centre Party among Russian speaking voters. The controversial contract of co-operation between Estonian Centre Party and Russian 'party of the power' United Russia concluded in December, 2004 has probably contributed to success in ethnic Russian electorate as well.
After failed attempts to form a coalition of stable majority with either Social Democrats or Reform Party, Centre Party's one-party government in Tallinn was lead by Jüri Ratas, a 27 year old politician elected the Mayor of Tallinn in November 2005. He was replaced by Savisaar in April 2007. The Centre Party is also a member of coalitions in several other major towns of Estonia like Pärnu and Tartu.
In the Estonian parliamentary election, 2007, they received 143,528 votes (26.1% of the total), an improvement of +0.7%. They took 29 seats, a gain of one seat compared to the 2003 elections, though due to the 2004 defections which had decreased their strength, they actually gained 10 seats. They are now the second largest party in Parliament and the largest opposition party. In 2008, the party have criticised Andrus Ansips policies, that in Centre party's opinion have contributed to Estonia's economic problems of the recent times. On June 16, 2007, Edgar Savisaar and Jaan Õmblus published a proposal of how to improve what they regard as Estonia's economic crisis.