Granada Club de Fútbol was initially formed as Recreativo de Granada in 1931. The club made its first appearance in La Liga for the 1941-42 season but has spent most of its history in the second and third tiers of the Spanish league system, occasionally dropping as low as the fourth tier. Traditionally, the club's biggest rival is Malaga, with whom Granada contest the east Andalusia derby. Over the years, the clubs' head-to-head performances have been fairly even, with Granada currently having more wins.
In 2009, Granada came close to going out of business due to mounting financial difficulties. Eventually, these difficulties were eased by an agreement formed with Italian club Udinese. As a result, Granada received several reserve and youth players on loan and achieved multiple promotions, eventually returning to the top flight in 2011-12 for the first time in 35 years.
Although Granada have never won a major national trophy, the club reached the final of the 1958–59 Copa del Rey. The match, played at the Santiago Bernabéu Stadium, ended with a 4-1 defeat at the hands of Barcelona, but it remains the closet the club has come to major silverware. The team's most consistent era came in the 1970s, during which time Granada were in the top flight for eight seasons. In the 1971–72 season the club finished in sixth place and that was matched once again in 1973–74. To date, these two sixth-place finishes remain the best in the club's history.
Noteable players to represent the club over the years include Carlos António Gomes, Ramón Aguirre Suárez, Antonio Notario and César Rodríguez Álvarez.
Since 1995 the club has played home matches at the Estadio Nuevo Los Cármenes. The stadium initially had a capacity of 16,212. However, after the club gained promotion to La Liga, the capacity was expanded and it currently stands at 22,524.