Councillor William Powell is "now conscious" but remains in intensive care in hospital with coronavirus symptoms.
A spokesperson said the Powys County Councillor for Talgarth is responding "well" to treatment after being admitted to Nevill Hall Hospital in Abergavenny on Thursday, March 26. On admission he was immediately transferred to intensive care and placed on a ventilator.
A Welsh Liberal Democrat statement read: "We are pleased to be able to confirm that, two and a half weeks after being admitted to hospital with Covid-19, William Powell - Liberal Democrat condition is improving.
"Although he remains in ICU for the moment, he is responding well to treatment and is now conscious again.
"He has received outstanding treatment from the NHS staff in Nevill Hall Hospital and we are incredibly grateful to them for all they have done, and continue to do, to keep us all safe and well."
It continued: "We ask that people continue to respect his family's privacy at this time, but we are hugely grateful for the outpouring of support we have seen over the past two weeks."
Jane Dodds, leader of the Welsh Liberal Democrats, said the news was a "great start to the week".
In a video message posted on Twitter, she said: "Particularly brilliant news is that Bill Powell, our dear friend, is showing signs of recovery and is beginning to come out of the terrible illness which has afflicted him for two and a half weeks.
"We thank all the doctors and nurses in Nevill Hall Hospital who've attended to him. Bill will be staying in the intensive care unit for some time yet."
Cllr Powell is a former president of the Welsh Liberal Democrats and Assembly Member for Mid and West Wales.
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