Chelsea were founded on March 14, 1905 at The Rising Sun pub (now The Butcher's Hook), opposite the present-day main entrance to the ground on Fulham Road, and were elected to the Football League shortly afterwards. The club's early years saw little success; the closest they came to winning a major trophy was reaching the FA Cup final in 1915, where they lost to Sheffield United. Chelsea gained a reputation for signing big-name players and for being entertainers, but made little impact on the English game in the inter-war years.

Former England centre-forward Ted Drake became manager in 1952 and proceeded to modernise the club. He removed the club's Chelsea pensioner crest, improved the youth set-up and training regime, rebuilt the side, and led Chelsea to their first major trophy success – the League championship – in 1954–55. The following season saw UEFA create the European Champions' Cup, but after objections from The Football League and the FA Chelsea were persuaded to withdraw from the competition before it started.

The 1960s saw the emergence of a talented young Chelsea side under manager Tommy Docherty. They challenged for honours throughout the decade, and endured several near-misses. They were on course for a treble of League, FA Cup and League Cup going into the final stages of the 1964-65 season, winning the League Cup but faltering late on in the other two. In three seasons the side were beaten in three major semi-finals and were FA Cup runners-up. In 1970 Chelsea were FA Cup winners, beating Leeds United 2–1 in a final replay. Chelsea took their first European honour, a UEFA Cup Winners' Cup triumph, the following year, with another replayed win, this time over Real Madrid in Athens.

One of the first post-War matchday programmes - Chelsea Reserves vs Crystal Palace Reserves, 27 October 1945.The late 1970s and the 1980s were a turbulent period for Chelsea. An ambitious redevelopment of Stamford Bridge threatened the financial stability of the club, star players were sold and the team were relegated. Further problems were caused by a notorious hooligan element among the support, which was to plague the club throughout the decade. Chelsea were, at the nadir of their fortunes, acquired by Ken Bates for the nominal sum of £1, although by now the Stamford Bridge freehold had been sold to property developers, meaning the club faced losing their home. On the pitch, the team had fared little better, coming close to relegation to the Third Division for the first time, but in 1983 manager John Neal put together an impressive new team for minimal outlay. Chelsea won the Second Division title in 1983–84 and established themselves in the top division, before being relegated again in 1988. The club bounced back immediately by winning the Second Division championship in 1988-89.

After a long-running legal battle, Bates reunited the stadium freehold with the club in 1992 by doing a deal with the banks of the property developers, who had been bankrupted by a market crash. Chelsea's form in the new Premier League was unconvincing, although they did reach the FA Cup final in 1994. It was not until the appointment of former European Footballer of the Year Ruud Gullit as player-manager in 1996 that their fortunes changed. He added several top-class international players to the side, particularly Gianfranco Zola, as the club won the FA Cup in 1997 and established themselves as one of England's top sides again. Gullit was replaced by Gianluca Vialli, who led the team to victory in the League Cup and the Cup Winners' Cup in 1998, the FA Cup in 2000 and the UEFA Champions League quarter-finals in 2000. Vialli was sacked in favour of another Italian, Claudio Ranieri, who guided Chelsea to the 2002 FA Cup final and Champions League qualification in 2002–03.

In June 2003, Bates sold Chelsea to Russian billionaire Roman Abramovich for £140 million, completing what was then the biggest-ever sale of an English football club. Owing to Abramovich's Russian heritage, the club were soon popularly dubbed "Chelski" in the British media. Over £100 million was spent on new players, but Ranieri was unable to deliver any trophies, so he was replaced by successful Portuguese coach José Mourinho, who had just guided FC Porto to victory in the UEFA Champions League.

In 2005, Chelsea's centenary year, the club became Premiership champions in a record-breaking season (most clean sheets, fewest goals conceded, most victories, most points earned), League Cup winners with a 3–2 win over Liverpool at the Millennium Stadium and reached the Champions League semi-finals. The following year, they were again League Champions, equalling their own Premiership record of 29 wins set the previous season. They also became the fifth team to win back-to-back championships since the Second World War and the first London club to do so since Arsenal in 1933-34. In 2007 Chelsea won the League Cup for the second time in three years, and finished 2nd in the Premier League. As consolation for their failed title challenge, Chelsea beat Manchester United 1-0 in the FA Cup final.