In 1918 the "Reds" lost the Finnish Civil War. The Social Democratic Party of Finland had supported the losing side, and several of its leaders were refugees in the Soviet Union. Some of these refugees founded the Communist Party of Finland in Moscow.
The SKP was illegal in Finland until 1944. After the Continuation War the SKP dominated the Finnish People's Democratic League, which was founded in 1944 as an umbrella organization of the radical left wing.
The era of the Cold War was the "golden age" of Communists in Finland. Between 1944 and 1979 support of the Finnish People's Democratic League was in the range of 17%–24%. Communists participated in several cabinets, but Finland never had a communist Prime Minister or President. In the mid 1960s the U.S. State Department estimated the party membership to be approximately 40 000 (1.44% of the working age population). The SKP received substantial financial support from the Soviet Union during the Cold War . Soviet threats to withdraw support were the main reason why reformists didn't expel the hardline Stalinist minority (Taistoists, after Taisto Sinisalo) from the party leadership or membership.
The youth wing of the SKP was the Communist Youth League of Finland (SKNL, 1925–1936).
The SKP's main rival for domination of the political left was the Social Democratic Party of Finland. The competition was very bitter in trade unions and other leftist organizations. The Communists gradually lost ground and were weakened by internal disputes. Taistoists often attacked the more Eurocommunist party leadership. In practice, the party consisted of two parallel structures. In 1985–1986 a large number of Taistoists, hundreds of party organizations with thousands of members, were expelled. They regrouped as Communist Party of Finland (Unity) (SKPy) which later evolved into the current Communist Party of Finland.
The collapse of the Soviet Union led to ideological conflicts within the party, and bitter internal disputes plagued the party. The depression that started in 1989 resulted in financial bankruptcy in 1992. The SKP never recovered. A majority of the party members, with other member organizations of People's Democratic League, formed the Left Alliance in 1990.
SKPy, originally the faction of the party expelled in 1985–1986, outlasted its parent and registered itself as the Communist Party of Finland in 1997 but has been unable to regain the former Communist Party's parliamentary representation. Its vote share in the elections of 2007 was 0.7%.