The club was conceived by Nathaniel Creswick and William Prest, two members of a Sheffield cricket club who were looking for a way to stay fit during the winter. Creswick and Prest were also responsible for crafting the club's rules of play, which included no offside provision and introduced freekicks for fouls. The club formally adopted those rules on 21 in October 1858 and they were subsequently used by several clubs in the North of England. Sheffield joined the Football Association in 1863, but continued to use its own rules until it adopted the FA rules in 1878.
When the FA allowed professional football in 1885, Sheffield remained an amateur club, starting its decline. It currently plays in the Northern Premier League Division One South, which is the eighth level in the English football pyramid.
In 2004, Sheffield became one of only two clubs ever to have received the FIFA Order of Merit. The other club is Real Madrid.