The club was first inaugurated in the 1918-1919 season, operating in the old Victory league, formed in celebration of the end of the First World War.

Afterwards, the team was admitted to the North Eastern League where they played for two seasons before being admitted to Division 3 North in 1921. The club operated in that league until 1928, when they failed to gain re-election and were replaced by Carlisle United F.C.

The club reformed in 1950 and gained admission to the Wearside League, where they operated until 1952 before joining the Northern League where they remained until 2008. At the end of the 2007/08 season, their second Championship winning season the club finally achieved promotion to the UniBond First Division North.

The club has occupied five different grounds since its formation. In their first season the club played at Garden House Park before moving to Kepier Heughs, near to the old Ferens Park ground where they stayed for four seasons.

The club then moved on to Holliday Park (named after the late Alderman T.W. Holliday) where they stayed until 1938. The club’s fourth ground, named after the late Alderman H.C. Ferens, was acquired when the club reformed in 1950. Alderman Ferens was for many years, prior to his death in 1975, President of the club and a generous benefactor in connection with the purchase of the land for that ground. Ferens Park was at that time probably one of the most attractive grounds in the Northern League. The ground hosted the club’s largest attendance, which stands at 7,000, for an F.A. Cup Second Round tie against Tranmere Rovers on 7 November 1957 which City lost 0-3.

City left Ferens Park at the end of their first Championship winning season in 1993-94 because their ground wasn’t completed on time in order to join the Northern Premier League. After ground-sharing with Chester-Le-Street Town for a season the club moved to its fifth ground – New Ferens Park.

Durham's first season in the Northern Premier League saw them win Division One North, earning promotion to the Premier Division; they also won the league's Chairman's Cup. However, their main sponsor withdrew in the summer of 2009 after the Football Conference ruled that they would not accept clubs with artificial pitches, which Durham had. As a result, the club lost most of its players and won only two league matches during the 2009–10 season. They finished bottom of the table with zero points after having six points deducted for playing a player under a false name and were relegated back to Division One North. Although they managed to finish in mid-table in the following two seasons, they resigned from the league at the end of the 2011–12 season and returned to Division One of the Northern League. After finishing in the bottom three in 2015–16, the club were relegated to Division Two.

In 2021–22 Durham finished bottom of Division Two of the Northern League and were relegated to Division One of the Wearside League. After another season of turmoil, Durham once again found themselves at the bottom of the Wearside League Division One, despite efforts to save the club by new management and volunteers.