The Swedish American Line was founded in November 1914 by the Swedish ship owner Dan Broström. The Rederiaktiebolaget Sverige-Nordamerika initiated a direct Gothenburg-New York service in 1915 with the ex-Holland-America liner Potsdam.

In 1925 the company was renamed Svenska Amerika Linien (Swedish American Line). The first newly constructed vessels were acquired in 1925 and 1928. In March 1923 the Swedish American Line announced that Armstrong Withworth & Co in Newcastle had received an order for a new transatlantic liner – the Gripsholm. On the 26th November 1924 the first Atlantic motorship is launched and named Gripsholm. On the 7th November 1925 the Gripsholm is delivered, and the company is officially renamed Ab Svenska Amerika Linien. On the 21st November 1925 the Gripsholm departs Gothenburg on her maiden voyage bound for New York.

Three ships named Stockholm were planned in the 1930s and 1940s, all having bad luck. Stockholm (2) was destroyed by fire whilst under construction in 1938. Its replacement, Stockholm (3) was destroyed in the war.

During World War II the Drottningholm and the Gripsholm were used as repatriation ships and made 33 voyages to exchange approximately 30,000 prisoners of war, diplomats, women and children, between the warfaring nations.

The Stockholm (4) of 1948 did manage to enter service, but was severely damaged in the Andrea Doria collision. There then followed three successful cruise/passenger liners, of highly distinctive appearance, which built up an exceptional reputation. Increased costs in the 1970s forced the company to look at re-flagging, but negotiations with the Swedish Unions failed, and the last two ships were sold in 1975. After 60 successful years, the company's passenger ship operations were dissolved in 1975, suffering severely from a weakened cruise market. This resulted in the end of the company.

SAL's Atlantic route played an important part in the 20th century emigration from Scandinavia to North America, as well as for business and recreational travel. The company and its ships were the pride of the nation and the youngest of the liners was always regarded as the flagship of the Swedish merchant marine.