In the 1920s, the Liberal Party, although previously dominant in New Zealand party politics, seemed in serious long-term decline, and its organization had decayed to the point of collapse.

The United Party has emerged from a faction of the decaying Liberal Party known as "the National Party" (not directly related to the modern National Party, although it may have inspired the name).

George Forbes, a Liberal Party leader, leads the faction.

In 1927, Forbes had joined with Bill Veitch (who leads another faction of the Liberals, but who had once been involved with the labor movement) and with Albert Davy (a well-known and highly successful organizer for the Reform Party, the traditional opponent of the Liberals).

They had hoped that the United Party would draw support not only from former Liberals, but from moderates on either the right or left of the Liberals.

The new organization had adopted the name "the United Party".

This reflects in shortened form the name of the "United New Zealand Political Organisation", which Davy had used after he had left Reform.

Forbes and Veitch both contested the leadership, but eventually, Joseph Ward won the position.

Although Ward, a former Liberal Prime Minister in 1906 - 1912, does not enjoy the best of health, Davy backs him as a compromise candidate .In the 1928 elections, the new United Party performs surprisingly well, winning twenty-seven seats.

The Reform Party also has twenty-seven seats, the Labour Party has nineteen, the Country Party has one, and independents hold six.

The United Party forms a government with the backing of the Labour Party, and Ward becomes Prime Minister again.

The United Party represents an unexpected resurgence of the Liberals, and some historians consider it nothing more than the Liberal Party under a new name.