The club was formed in 1886 and was elected to the Football League in 1950. The club has since competed in each of the lower three tiers of the Football League, in addition to one season spent in the Conference Premier in 2003–04. It has also competed in the Welsh Cup, winning it six times, a record for an English team.
Shrewsbury Town were formed in 1886, following the demise of first Shropshire Wanderers and later indirectly Castle Blues. The Blues were a rough team, leading to their demise after several games were marred by violence. The new team hoped to be as successful but without the notoriety. Press reports differ as to the date the new club was formed, The Eddowes Shropshire Journal of 26 May 1886 reported the birth of the club at The Lion Hotel, Wyle Cop, Shrewsbury. The Shrewsbury Chronicle reported the club's being formed at the Turf Hotel, Claremont Hill, Shrewsbury. It may be both accounts are true, with a get-together at The Lion being finalised at the Turf.
After friendlies and regional cup competitions for the first few seasons, Shrewsbury were founder members of the Shropshire & District League in 1890–91, later admitted to the Birmingham & District League in 1895–96. Many of the teams Town faced in the early days have vanished, however Shrewsbury met many of today's Football League and Conference teams, including Crewe Alexandra, Coventry City, Stoke City, Kidderminster Harriers and Stafford Rangers.
In 1910, Shrewsbury looked to move to a new ground, having spent early years at locations across the town, notably at Copthorne Barracks west of the town. The club moved to Gay Meadow on the edge of the town centre, within sight of Shrewsbury Abbey, and stayed 97 years.