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Founded on 1 April 1910, it became the branch number 2 of Sporting Clube de Portugal (Sporting CP). In its entire history, the club has won nine major trophies: the AF Algarve Championship five times, the Segunda Divisão twice, and the Terceira Divisão and AF Algarve First and Second Divisions once each. Aside from its major trophies, the club as of 2013, has played 23 seasons in the Primeira Liga of which their highest league table classification came in the 1994–95 season where they managed a fifth-place finish.

On the back of that best-ever finish, Farense qualified for the UEFA Cup for the first time, losing in the first round to Olympique Lyonnais by a single goal in each game. The club also reached the final of the Taça de Portugal in 1990 where they lost to Estrela da Amadora. Among the mainstays of their 1990s teams were the Moroccan attacking duo of Hajry Redouane and Hassan Nader.

The 2001–02 season saw the club relegated to the second tier of Portuguese football. In 2006, the club was in the sixth tier, the second district league of the Algarve Football Association, but won two consecutive promotions as champions. In 2012–13 they were promoted to the Segunda Liga. In 2019–20, after the season was curtailed due to the COVID-19 pandemic, the club were promoted back to the top flight after 18 years, under manager Sérgio Vieira. One year later, they were relegated on the final matchday after a 4–0 loss at C.D. Santa Clara.

On 3 February 2023, Farense sacked manager Vasco Faísca before a match against Estrela da Amadora, who had cut their advantage in second place to one point. His replacement José Mota led the club back to the Primeira Liga.