When the Great Depression came, West Virginia was one of the states hardest hit. In 1932, West Virginia Democrats, inspired by Franklin D. Roosevelt's call for a “New Deal” and led by gubernatorial candidate Herman Guy Kump, won political control of the state for the first time in 35 years. Though Governor Kump and his successor, Homer Holt, sometimes resisted the initiatives from Washington, the New Deal helped West Virginians deal with one of the highest unemployment rates of the Depression era.

Federal work relief agencies such as the Works Progress Administration organized public projects to provide income to the unemployed. The Civilian Conservation Corps and the National Youth Administration addressed the lack of opportunities for youth. The Public Works Administration provided work as well as needed public facilities through more capital-intensive projects, including the construction of several West Virginia courthouses. Thousands of West Virginians worked for these relief agencies, and almost everyone was affected by the Social Security law of 1935. Social Security enabled the state to move away from its antiquated and piecemeal system of poorhouses and local care of indigents, the elderly, and the disabled and to establish a modern system of unemployment relief and welfare. New Deal agencies also sponsored experimental cooperative communities at Tygart Valley (Dailey), Arthurdale, and Red House (Eleanor).

Though some work relief projects amounted to little more than leaf raking, others left an enduring legacy. At the beginning of the 21st century, many roads, bridges, parks, airports, government buildings, and public housing facilities built under New Deal programs continue in service. They include Kanawha Boulevard in Charleston and Richwood Avenue in Morgantown; Boreman Hall at West Virginia University; flood-control walls in Huntington; and state parks, including Babcock, Cacapon, Holly River, Lost River, and Watoga.

The New Deal brought about a friendlier legal atmosphere for organized labor, enabling the United Mine Workers of America finally to organize West Virginia coal miners in 1933—34 and increasing the political power of the labor movement in the state. The unionization of coal and other basic industries and the popularity of Social Security and other social legislation associated with Roosevelt's New Deal assured that West Virginia would be solidly Democratic for decades to come. As U.S. senator, Matthew M. Neely championed the Roosevelt reforms that the more conservative “statehouse” Democrats led by Kump and Holt were sometimes reluctant to embrace. As governor after 1941, however, Neely found that a conservative legislature frustrated his efforts to make the state more liberal.

Though the New Deal helped make the Depression more tolerable and brought needed reforms to West Virginia, it failed to find a path toward enduring solutions to the state's basic economic dilemmas. The New Deal ended with the coming of World War II.