Until fairly recently it was generally believed that the club was formed in the Mid 1880’s with no official records still existing. Recent research however has revealed that in 1879 Caersws played fixtures against amongst others Newtown, Druids and Llanidloes. There are also records of matches between Caersws Red Rose and Newtown Blue Stars on 24th December 1877 and on Boxing Day Caersws British played Newtown Blue Stars second XI. However it was not until the late 1950’s that the exploits of the Bluebirds began to match and indeed surpass those of their Mid Wales neighbours. Since then the club has reached the final of eight all Wales competitions including winning the Welsh Amateur Cup against Buckley Wanderers in 1961 and the Welsh intermediate Cup against Aberystwyth Town in 1989. The honours list also includes nine Welsh National League (Mid Wales) section championships, eight runners up and six league cup wins. The Montgomeryshire Challenge Cup has been won 24 times.
In the two seasons prior to the formation of the League of Wales, the club played in the Cymru Alliance, being runners up in 1991 and champions in 1992.
In the inaugural season of the League of Wales the club reached the final of the league cup and finished in 11th place. The Bluebirds were the losers in the first league cup final but won it in 2002, 2003 and 2007.
Having finished fourth in 2002 the club qualified for the European Inter Toto Cup and were drawn against PFC Marek of Dupnitsa (Bulgaria) in the first round. The Bulgarian full timers won the first leg 2-0 with two late goals but Caersws earned a creditable 1-1 draw in the home leg played at Aberystwyth. In 2007 the clubs long serving manager called it a day after 24 highly successful seasons.
The club flirted with relegation in the following seasons firstly under Mike Barton and then Dave Taylor until in 2009 Mickey Evans made a shock return to the club. However this move did not improve the clubs fortunes and at the end of 2009/10 season the club were relegated to the Huws Gray Alliance following Welsh Premier League restructure.
In the seasons following the club has always been amongst the front runners without really challenging for promotion. However in that time the club has reached the final of the league cup on three occasions finally winning it in the 2014/15 season.