Adherents to these policies became known as federalists. An opposition to Federalist policies began to emerge by 1791 and became the Republican Party. It found a power base among small farmers, producers, and traders, many Southern plantation owners and some urban artisans. Weak in New England, the party showed some strength in the Middle Atlantic States and in the South. The chief leaders, Thomas Jefferson and James Madison, were supported by the poet-journalist Philip Freneau in his National Gazette. It was a propaganda instrument which served as an important organizing agency. Other leaders included Albert Gallatin and James Monroe. Though the Jeffersonian party sought mass support it developed as a "cadre" party.

Initial policy orientations reflected the perspectives of the party’s followers, including opposition to Hamilton’s economic proposals, demands for the government responsible to popular majorities, demands for the federal government to operate with a narrow construction of the Constitution, and the denial of the national bank, emphasis on states rights as opposed to centralized government, and emphasis on personal and political liberties, shown in the Kentucky and Virginia Resolutions which condemned the Alien and Sedition Acts.

The party held the support of the agrarian freeholding rural America with industry and merchandising as partners. However, there was no consensus on republican constitutional government and property rights. In foreign policy, they favored France over Britain and sharply criticized Jay’s Treaty.

When Aaron Burr and Jefferson led in electoral votes, the Democratic-Republicans came into power, leading what is called the Revolution of 1800. The electoral system made no provision for separate votes for president and vice president and a contest in the House resulted in Jefferson’s eventual succession to presidency. The Democratic-Republicans won a clear Senate majority and a two-to-one majority in the House.

The increasing acceptance of the principles of the party over Federalist principles brought into tradition the notion of a democratic republic where the elimination of property and taxpaying limits of voting led to universal suffrage. The Jefferson coalition was soon enlarged leading to easy victories for the Virginian presidents Jefferson, Madison and Monroe. The party always had a congressional majority, sometimes overwhelming, and there were more Democratic-republican judges. In 1820, Monroe came within one vote of unanimous election in the electoral college, and thus the nation entered into what was called "The Era of Good Feelings."

Important leaders during this period were Albert Gallatin, John Quincy Adams, and John Taylor, who distributed treatises for the party. The party was also growing with prominent figures like Henry Clay. The policies of the party began in a Jeffersonian direction, but in the Louisiana Purchase, Jefferson was forced to diverge from strict constitutional construction, and was faced by John Marshall in the Supreme Court.

The Democratic-Republican party, during the Era of Good Feelings, became a mere label, as partisanship died down. When it reemerged, Andrew Jackson led the Democratic party which split off, leaving the rest in the National Republican Party.