We have determined the luminosity function of 250um-selected galaxies detected in the ~14 sq.deg science demonstration region of the Herschel-ATLAS project out to a redshift of z=0.5. Our findings very clearly show that the luminosity function evolves steadily out to this redshift. By selecting a sub-group of sources within a fixed luminosity interval where incompleteness effects are minimal, we have measured a smooth increase in the comoving 250um luminosity density out to z=0.2 where it is 3.6+1.4-0.9 times higher than the local value.