Cllr John Scragg unveiled the plaque at a house in Westmead Lane, Chippenham, close to where Dame Florence Hancock was born in 1893.
He said: “There is only one house still standing of the type that Dame Florence lived in and the owners were very happy to have the blue plaque sited on their wall.
“Afterwards, they invited us in for tea and cake. There were many of Dame Florence’s relatives there, it was like a family reunion, and good to see.”
Dame Florence’s relatives, some of whom still live in the town, attended the ceremony at Tanners Cottage on Tuesday morning.
They included her nieces Margaret Vines and Mary Treby, while other family members had travelled from Bristol and Southampton for the event.
Michael Stone, chairman of Chippenham Civic Society, said they had campaigned for many years for a blue plaque to commemorate the local heroine who rose from humble beginnings to become a trades union leader.
Dame Florence rose from poverty in the town to become in 1949 the second female presidents of the Trade Union Congress.
Mr Stone said: "We are fortunate that the owner of the nearest standing building to the house where Florence was brought up is delighted to be part of the scheme and has kindly given us permission to erect a plaque in her honour."
Michel Guest, a spokesman for Dame Florence Hancock’s family, cut a commemorative cake after the ceremony.
One of 16 children, Dame Florence was the daughter of Jacob and Mary Hancock, who both worked as weavers at the local cloth mill.
She attended Westmead School until the age of 12 when she left to work in the kitchen of a local cafe for three shillings a week.
At 14 she went to work at the Nestle Condensed Milk Factory, where in 1913 she helped organise a strike for a living wage - the very first factory strike in the town.
A life in the trades union movement followed, first with the Workers' Union and then the Transport and General Workers' Union (TGWU), for whom she was National Woman Officer.
In 1949, Dame Florence was elected the second female president of the Trade Union Congress (TUC).
She died in 1974 having lived long enough to see her life's work, equal pay for men and women, become law in Britain.