Prostitution in Denmark was partly decriminalised in 1999, based partly on the premise that it was easier to police a legal trade than an illegal one. Third-party activities, such as profiting from brothel administration and other forms of procuring, remain illegal activities in Denmark, as do pimping and prostitution of minors.

The Civil Code of 1683, or Christian 5.s Danske Lov (also enacted in the Danish province of Norway as the Civil Code of 1687 or Christian Vs Norske Lov) explicitly banned extramarital sex (including prostitution) as fornication. Danish law prescribed jail for men and whipping for women caught in fornication.

Prostitution ("professional fornication") was regulated in Denmark during the nineteenth century, with police playing an active part. Nineteenth-century policies to prostitution were driven by the idea that it was a primary source for sexually transmitted diseases, with women being registered and subject to increasingly regular examinations. In 1815, registration of prostitutes was introduced in Copenhagen, with women being registered as prostitutes in the police records, forced to register at a (police surveilled) 'tolerated' brothel and subjected to regular examinations, with forced hospitalisation during illness. Technically prostitution was still illegal, so regulation was carried out discreetly by order of King Frederick VI (1808–1839). On 11 February 1863, this policy was officially recognised and given some legal ground, and in 1874, the system of regulated prostitution was officially introduced in Danish law, with legal grounds for forced examination and hospitalisation of suspected prostitutes.

These policies became the target of women's groups and religious groups, such as the Foreningen imod Lovbeskyttelse for Usædelighed, forcing some relaxation in 1885. Brothels were eventually banned in 1901, and in 1906 forceful examination was abandoned.

Decriminalisation occurred in 1999. In 2006, the government announced a campaign to combat prostitution and racketeers involved in organising the trade and human trafficking, following a commissioned police report entitled Strategi for en styrket politimæssig indsats mod prostitutionens bagmænd (Strategy for an enhanced police effort against the masterminds of prostitution). Justice Minister Lene Espersen (DFK) announced an intensified police effort against traffickers while promising a more sympathetic approach to victims and witnesses, with new police reforms effective 1 January 2007. This would replace an earlier strategy due to expire at the end of 2006. In February 2013, Justice Minister Morten Bødskov announced further measures and introduced a bill, arising from the 2012 report of the Criminal law Council, extending provisions against exploitation from brothels to escort services and street prostitution, increasing penalties and giving police more powers.

In 2009, the Ministry of Justice ordered the Criminal Code Council (Straffelovrådet) to undertake a comprehensive review of Chapter 24, and they delivered their report in November 2012. In the terms of reference, they were asked specifically to comment on whether the buying of sex should be banned. Amongst their recommendations were;

In addition, the Council proposed adjusting the maximum penalties for the participation of a child under 18, for payment or promise of payment, having sexual relations with a client, or for being a spectator to a show with pornographic performances involving a child under 18, in order to meet the demands of the EU directive on combating the sexual abuse of children. They also proposed adjusting the maximum penalties for aiding the prostitution of others.

With regards to a ban on buying sex, the Council concluded that such a ban would only be justified as a moral rejection of the purchase of sex. With the knowledge on prostitution in Denmark and the information on the experience of the ban on buying sex in other countries, the council's opinion was that a ban on buying sex will not have a significant positive impact in any other respects than the punishing those who purchase sex. On the contrary, a ban on buying sex could have negative consequences for a number of prostitutes in terms of worsening economic conditions and in the form of increased stigma.