• Federalists vs. Republicans, 1790s-1810s
• Federalists, led by Hamilton and Adams, wanted a powerful national government to push for aggressive economic development
• Republicans, led by Jefferson and Madison, wanted a small national government to leave the citizens mostly free of taxation or government interference
• Federalists controlled government through 1790s, Republicans dominated after 1800; Federalists disintegrated as a national party after War of 1812

The first era, or first party system, lasted from 1796 to 1816. For the first eight years of the nation's existence, George Washington provided a unifying presence. But when he retired, the nation quickly split into opposing camps along ideological lines; those two camps soon became known as Federalists and Republicans, the nation's two original political parties.

The Federalists, led by John Adams and Alexander Hamilton, believed in a strong national government. Reading broadly into the Constitution (loose constructionism), they argued that government power should be used to promote economic development through the creation of a national bank and the construction of federally-financed roads, harbors, and bridges. Federalists believed that America's economic future depended on the cultivation of strong commercial ties with Great Britain. And they argued that America's emerging manufacturing sector should be encouraged through protectionist measures such as tariffs.

The Republicans, also called Democratic-Republicans, were led by Thomas Jefferson and James Madison. They supported a weaker national government restricted in its powers by a narrow reading of the Constitution (strict constructionism). They feared that federal intervention in the economy would benefit only a few wealthy northeasterners, and they believed that agriculture, not manufacturing, should remain the country's economic base. Republicans opposed closer ties to Britain and tended to sympathize with the French in their revolution and subsequent war with the British.

While the Federalists dominated the government through the 1790s, they rapidly declined after 1800. Thomas Jefferson's election to the presidency was bolstered by Republican victories in the House of Representatives and the Senate. The Federalists remained powerful enough to obstruct certain Republican measures for about a decade, but they were not strong enough to prevent the United States from going to war against Britain in 1812—a war the Federalists vehemently opposed. Their continuing opposition to the war, even after it began, severely damaged their viability as a national party. When the United States survived its war with Britain and won tremendous victories at Baltimore and New Orleans, the Federalists' reputation was shot—and their national political clout was over.

For the next decade—a period sometimes called "The Era of Good Feelings"—the United States was essentially a one-party nation; the Republicans governed with little opposition. But factions within the party soon emerged, and these factions—labeled National Republicans and Democratic Republicans—eventually morphed into the dominant parties that would define the second party era, lasting from 1828 to the mid-1850s.