Founded in London in 1949 by unions opposing growing communist control of the World Federation of Trade Unions (WFTU) in the initial phase of the cold war. The breakaway was triggered by the WFTU's aim to absorb the hitherto autonomous International Trade Secretariats and its rejection of the Marshall Plan. With this background and the American Federation of Labor as an affiliate, the International Confederation of Free Trade Unions (ICFTU) in the first two decades of its existence strongly identified with Western democratic values and strictly refused contacts with communist and Eastern European state controlled unions.

Shortly after its founding the ICFTU established a network of regional organizations: the European Regional Organisation in 1950, the Organización Regional Interamericana de Trabajadores, the Asian Regional Organisation in 1951, and finally the African Regional Organisation in 1960. Increasing bilateral Eastern European contacts of member unions and a dispute concerning affiliation of the United Automobile Workers caused the walk out of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) in 1969, reentering in 1982.

Following the changes in the Soviet Union and Eastern European countries some trade unions in these countries left the WFTU to affiliate with the ICFTU. Membership as a rule was open to trade unions independent from external control but, from the Third World in particular, members with limited freedom from government, political parties and employers, were also accepted.

In 2006 the International Trade Union Confederation was founded from the merger of the former International Confederation of Free Trade Unions and the World Confederation of Labour.