The article addresses the origin and circumstances of the establishment of small and medium-sized enterprises in Algeria. It examines the factors that created and contributed to their growth, defines their nature, and highlights their characteristics throughout their evolutionary trajectory. This is done by examining previous stages before and after the French occupation, during the directed economy phase, and the initial stages of the transitional period towards a market economy. The article is structured around three key points: firstly, the historical origin of the enterprise sector; secondly, the impact of the directed economy experience on the sector of small and medium-sized private enterprises; and thirdly, the transitional stage to a market economy.