Among the many political parties influenced by liberalism, the British Liberal Party and the Liberal Democrats are two typical examples of a lineage. In 1906, the Liberal Party won the general election with an absolute majority of the vote, which marked the culmination of the Liberal Party's development. During the following several decades, with the development of British society and politics and the blow of World War I, the Liberal Party gradually lost its political niche in party competition. After World War II, the Liberal Party, led by Thorpe, worked hard to regain its footing. On this basis, this paper focuses on two main questions. What caused the demise of British Liberal Party after the First World War and how did the merger with Social Democratic Party accelerate the revival of the Liberal Party. Using the methodological approach of literature review, this paper will analyse the decline and revival of the Liberals, combining the perspectives of political science and history. It is argued that the decline of British Liberal Party should be attributed to the changing ideology, the rise of Labour as well as the catalysis of World War I. As for the revival of Liberal Party, it is stressed that its merger with Social Democrats in 1988 has been significant in facilitating its vote-winning and transition to parliamentary strength.