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The club was founded on 11 September 1949 and started and continues to be based in the town of Santa Rosa de Lima in the department of La Union. The club began playing in the second division and spent almost twenty years there until in 1971 Municipal Limeño got promoted to the top flight at the expense of UCA.

First tenure in the first division (1972–1975)

Municipal Limeño campaign of the 1972 season was exceptional one for a newly promoted team with them coming in sixth place with sixteen points their team was led strongly by the Guatemalan Tomas Gambo, who scored five goals (the team leading goalscorer) and enabled the club to qualify to the semi-final group. However their experience was an unhappy one with the team losing all their games and bowing out of championship contention. Limeño 1973 and 1974 season were unhappy campaign with the team struggling and finishing in the relegation group, however both time the team managed to survive relegation at the expense of Excelsior and Sonsonate. But after several near relegation, Municipal Limeño finally were relegated in the 1975 season after only earning 16 points from 33 games. The club were forced to play a promotion-relegation battle against Once Municipal in which the team lost and were relegated to the second division along with Juventud Olímpico.

Second Tenure in the first division (1993–2005)

It would not be until 1993, 18 years after getting relegated, that they would make a return to the first division. during their second tenure (1993–05) in the first division they reached the semi-finals six times, including reaching the grand final in the Apertura 1999 and Apertura 2000 under the coaching off Óscar Emigdio Benítez however both time the club lost in the grand final against Águila. They were once again relegated in 2005, after they lost a promotion-relegation match against Coca-Cola of Soyapango.

Third Tenure in the first division (2009–2010)

On 26 June 2009, Chalatenango going through financial troubles, sold their spot in the top flight Primera División to side Limeño. This resulted Municipal Limeño's return to the First Division after a four-year hiatus. However their campaign was an unhappy one with them finishing second last and forcing them to play a promotion/relegation match against Once Municipal which they lost and were relegated to the Second Division and that's where the club has remained ever since.

Recent Events

The club spent the next few seasons trying to regain promotion to the First Division, they made several second division semi-finals and grand finals but always falling short, however the club finally succeeded when they won the Apertura 2015 title defeating Fuerte San Francisco, then winning the Clausura 2016 title defeating Atlético Comalapa of Chalatenango 5–4 in penalties, after tying on aggregate 3–3, the club were promoted back to the Primera Division.

Municipal Limeno confirmed a fourth relegation from the Primera division on 2 May 2022 despite a 1–0 victory over Isidro Metapan at Jose Romero Berios. Limeno's run in the Primera División from 2016 to 2022 was a mix of little to moderate success, with the biggest success of the club was reaching CONCACAF League the first international tournament for the club and Being the club Nicolas Munoz scored his 303-goal making him the highest scorer in Central American league history.[1]

After spending one year in the Segunda division, On the 26th of June, 2023 Municipal Limeno returned to the Primera division after acquiring the spot of Historic team Atletico Marte. The club announced Honduran Jorge Pineda as head coach of the team and will be accompanied by compatriot German Rodriguez as assistant coach.