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Berwick Rangers was officially formed on 7 January 1881 after a match was played in the town between a team of millworkers from Dunbar and a team of railway clerks from Newcastle. For much of the club's history it was believed that they had formed in 1881, though recent research indicates that 1884 is the more likely date of formation. Their first competitive match was against another team from Berwick, 'The Royal Oaks' on 16 February 1884. Berwick Rangers won the match by "one goal to nil".

Berwick Rangers affiliated to the Scottish Football Association around 1905 and entered the Scottish Border League in 1905, followed by the Border Amateur League (1908–09). Recent research has revealed that the club joined the East of Scotland League immediately after the First World War, a new competition formed to replace the Borders League. The club made several attempts to join the North Northumberland League but were rebuffed. It was not until 1951 that they were admitted to Scottish Football League C Division (North & East). This third tier, made up largely of reserve sides, had been created in 1946 and was regionalised in 1949. The division was scrapped in 1955 and Berwick, along with the other non-reserve teams, were placed in an enlarged Division B (renamed Division Two the following season). Berwick Rangers have played in the Scottish football league system ever since, despite low attendances and frequent financial problems.

Following its foundation, the club had had a nomadic existence before eventually settling down at Shielfield Park in 1954.

A notable early success was a 3–0 win over Dundee in the Scottish Cup in 1954 in a run which saw them reach the quarter-final, only to lose to Rangers 4–0. Ten years later they reached the semi-final of the Scottish League Cup, losing to Rangers 3–1.

Arguably their greatest success came in 1967, when they beat Rangers 1–0 in the Scottish Cup under the management of player manager Jock Wallace. It was the highlight of a memorable cup run, which had seen them break a club record in beating Vale of Leithen 8–1 in the first round. The result sent shockwaves around Scottish football and led to a number of the Rangers players leaving Ibrox; it was also the club's greatest home attendance of 13,365. They were paired with Hibernian in the following round but lost 1–0 in front of a crowd of nearly 30,000.

The following years saw little progress until the late 1970s, when under the management of Dave Smith they won the Division Two title in 1979. Despite that success they were unable to build and suffered a slow decline through the 1980s. The nadir came in season 1988–89 when they were nearly bankrupted and the club were locked out of Shielfield, having to play their games elsewhere. In 1988 Jim Jefferies took over as manager and led the team to a club record 21 game unbeaten run.

The club weathered this and other crises in the early 1990s, narrowly avoiding going into administration in 1994. Later in the decade Berwick enjoyed a bit more in the way of success only missing out on promotion to Division One due to league reorganisation in 1994. They were relegated to Division Three in 1997 but under the management of Paul Smith regained promotion in 2000. Under Smith's stewardship they took both Rangers and Heart of Midlothian to replays in the Scottish Cup.

They were again relegated to the Third Division in 2005, and narrowly missed out on an instant return to the Second Division the following season, this time losing to Alloa Athletic in the Second Division play-offs. Despite losing a good deal of the squad to other clubs in the close season, manager John Coughlin exceeded expectations by rebuilding the team and guiding them to the Third Division championship in 2007, their first title in 28 years, in a season which also saw a new record for consecutive league wins.

John Coughlin resigned as Berwick Rangers manager after a 3–0 home loss to Alloa Athletic on 6 October 2007. He left with Berwick at the foot of the table with only 5 points after 9 games. Cowdenbeath coach Michael Renwick was appointed new manager on 25 October 2007. However, after a dismal season which saw Berwick finish bottom and ship 101 goals, including a 9–2 defeat to Peterhead, Renwick was relieved of his duties on 19 April 2008. The official website reported on 12 May 2008 that Camelon manager Allan McGonigal would take over as manager. He resigned from his post on 13 November 2008. His announcement came in the wake of a deal which saw a fan led consortium take control of the club. On 27 January the consortium concluded their deal to buy the club.

Following McGonigal's resignation Jimmy Crease became manager for the fourth time, initially as a caretaker, but then on a permanent basis in December 2008. Following a 4–0 defeat to Deveronvale in the second round of the 2011–12 Scottish Cup Crease stood down as manager. Player Ian Little was named caretaker manager until the end of 2011 when his position was to be reviewed. On 28 December 2011, Little was given the managers job at least until the end of the 2011–12 season. On 26 August 2012, Rangers FC played their first ever league game in England when they faced Berwick Rangers at Shielfield Park, similar to when the previous Glasgow Rangers played their famous cup game in 1967. Berwick Rangers earned another famous result, with a 1–1 draw – Fraser McLaren scoring in the 62nd minute of the game.

On 12 January 2014, Berwick Rangers sacked manager Ian Little, with the club third bottom in Scottish League Two. A few days later Colin Cameron was appointed as the club's new player manager.

On 18 May 2019, Berwick Rangers became the second club after East Stirlingshire to be relegated out of the SPFL pyramid and into the Lowland Football League, after a 7–0 loss on aggregate to Highland League champions Cove Rangers.

The Berwick Rangers Community Foundation was established in 2020.

Berwick Rangers record league performance was an 11–0 win over Vale of Leithen in the Scottish Lowland League on the 9 October 2021.