Athlone first competed in the League of Ireland in the 1922–23 season finishing sixth. They were the first non-Dublin club in the Irish Free State to compete in the national Free State League. They competed in the league until 1928 and not again until the 1969–70 season.

Athlone Town won the FAI Cup, their first domestic success in 1924, beating Fordsons. Dinny Hannon scored the only goal of the game, as Athlone went through the whole competition without conceding a goal.

Hannon was one of five Athlone Town players chosen to represent the Irish Free State at the 1924 Paris Olympic Games. The other players were Tommy Muldoon, Frank Ghent, John Joe Dykes and Paddy O'Reilly.

The club finished second in the league in the 1974–75 season earning a place in the UEFA Cup, the first time they had ever qualified for European competition. Their first-round game was against Norwegian side Vålerenga who they beat. Athlone's second round tie was against Italian side AC Milan drawing 0–0 in the first leg at St. Mel's Park setting a record attendance of 9,000 before losing the second leg at the San Siro 3–0.

Athlone won their first league title in the 1980–81 season. They played KB in Europe the following season earning a draw in the first leg in Denmark and again at St. Mel's Park going out on the away goal rule.

In the 1981–82 season Athlone Town won the League Cup for the second time beating Shamrock Rovers. However they failed to retain their league title that year finishing 4th. Athlone Town were again crowned league champions in the 1982–83 season and qualifying for Europe and also retained the League Cup beating Dundalk. Their opponents in Europe on this occasion were Belgian outfit Raymond Goethals managed Standard Liège, losing 3–2 at home and 8–2 in Liège.

In 1985 six new clubs were elected to the league increasing the leagues participation to 22. As a result, the current two division (Premier and First) structure was adapted with Athlone Town in Premier Division. In 1987 the club finished last and were relegated to the First Division. Their stay there was short, finishing top of First Division the following season, gaining promotion to the Premier Division. The club remained in the top flight until the 1991–92 season, when they finished eleventh and were subsequently relegated to the First Division.

Athlone Town again gained promotion to the Premier Division in the 1993–94 season, finishing runners-up to Sligo Rovers that season. The club were once again relegated in 1996, narrowly missing out on promotion in 2001 by one point to Monaghan United.

Since 2001 Athlone have finished each season in the bottom half of the first division. In that time eight different managers have been appointed. In 2007 the club moved from St Mel's Park to a new stadium, which was opened on 9 March when the home side hosted Kilkenny City in the opening game of the season.

In 2013, under the stewardship of Roddy Collins, the club won the First Division and were promoted bact to the Premier Division. However after losing most of their games in the first half of the season in 2014 the club was relegated back to the First Division.  Keith Long was appointed as Manager half way through that season and almost kept the team in the Premier Division but alas they were relegated on the closect of margins.

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In recent years the club has expanded its underage structure and now has eight teams apart from the senior team and they are;

U19 SSE Airtricity League

U17 Continental Tyres Womens National League

U17 SSE Airtricity League

U16 Dublin District Schoolboy League (DDSL)

U15 Girls Midland Schoolboy/girls League (MSL)

U15 SSE Airtricity League

U15 Dublin Distrtict Schoolboy League (DDSL)

U13 SSE Airtricity League

In 2017 the U15 team won the inaugral U15 SSE Airtricity League beating St. Patricks Athletic 2-1 in the final in the Athlone Town Stadium. During the 2017-18 season both the U16 and U14 girls teams completely dominated their Midland Schoolboys/girls competitions winning both their Leagues and their Cup with a 100% record. The U17 SSE Airtricity League team won the U17 SSE Airtricity League - Shield in the 2018 season having just missed out on a place in the last four on goal difference.