Most of these clubs were drawn from what was then the top division of the 1919–20 Southern Football League, in an expansion of the Football League south of Birmingham. As Cardiff City was long considered a potential entrant for the Second Division due to their FA Cup exploits and Southern League dominance, they were sent directly into the Second Division and Grimsby Town, last place in the Second Division for 1919–20, were relegated.
This league continued in 1921–22 as Football League Third Division South whilst the Football League Third Division North was formed with the Northern clubs, the two Divisions jointly forming the third tier.
Geographical separation was abolished in 1958 with the creation of the Football League Fourth Division.
The original members in 1958–59 were:
Of these, Bournemouth, Bradford, Hull, Norwich, Notts, QPR, Reading, Southampton, and Swindon have made the top flight in either the First Division or the Premier League era. Stockport, Doncaster, Notts County and Rochdale were the first to be relegated into the Fourth Division the following season (1959–60), starting the bottom-four-team turnover tradition for the third tier. As with the Second Division, the champion and runner-up were automatically promoted; the third place was also promoted automatically beginning in 1974. Play-offs for the third promotion place were introduced in 1987. AFC Bournemouth, formerly Bournemouth & Boscombe Athletic, hold the record as the club to have spent most time in this Division.