Constructed in 1912 as a factory, the building was purchased by the Communist Party of Germany (Kommunistische Partei Deutschlands, KPD) in 1926 and became the seat of its Central Committee. Named in honor of Karl Liebknecht, the KPD leader who was assassinated by a military death squad in January 1919, the building was the focus of one of the last mass demonstrations in Berlin against the Nazi Party on January 25, 1933—five days before Adolf Hitler was appointed German Chancellor. By then, the KPD was the third-largest party in Germany. Berlin police raided the headquarters three weeks later, and by March 1 the Nazi swastika flag was flying over the building. Renamed the Horst Wessel House, the building at first served as a district police station and detention center where Jews and political opponents were tortured. In 1935, the finance department of the state of Prussia moved into the building.
The building became the headquarters for the Party of Democratic Socialism (PDS)—the reformed successor of East Germany's former ruling party—in May 1990. In 2005, the PDS was renamed "The Left Party PDS" in preparation for its merger with the Party of Social Justice-Electoral Alternative (WASG). The building continues to serve as the headquarters of the new party which is called simply "The Left" (Die Linke), after the merger was completed in June 2007.
The Karl Liebknecht House is a protected national landmark.