Denmark recognized the Independence of Azerbaijan on 31 December, 1991. On 2nd April 1992 the diplomatic relations between the two countries were established. On 6-12 March 1995, The president of Azerbaijan Heydar Aliyev visited Denmark to participate at the International Conference. During his visit, he met with the Queen of Denmark and the Prime Minister of the Kingdom of Denmark.
In the second phase of the Neighbourhood Programme, Azerbaijan has the lowest priority, but Denmark still has focused activities in the country. Through a regional media programme, the media situation in Europe’s neighbouring countries will be strengthened, as the countries still face considerable challenges in the area of democracy, such as freedom of the press and freedom of expression. Generally, the media in the countries can be characterised as weak and unprofessional, and violations of the freedom of the press are frequent.
In Azerbaijan, the programme supports the media sector with a new, independent media centre, which provides resources for journalists and trains people from the press and public employees in areas such as freedom of the press and media development. 
Denmark also cooperates with Azerbaijan in bringing peace and political stability to the Caucasus, Denmark has contributed $4 million to programs to achieve this.
The 'Azerbaijan-Denmark Friendship Group' was established in the Azerbaijan parliament and is chaired by Azer Amirslanov.