Club Deportivo Chalatenango was founded in the early '50s under the name of C.D. Alacranes,at a time where the giants of El Salvador soccer, Quequeisque of Santa Tecla, became defunct and were replaced by a new generation of clubs. The football club was formed by Don Jose Gregorio Martinez and a group of chalatecos whose purpose was to create a team that represented Chalatenango and the north of El Salvador.
C.D. Chalatenango acquired the license to participate and after many years of competition they demonstrated their quality in the inferior divisions by winning four championships. However its economic situation was in a terrible state putting its existence in danger. During that period, Colonel Oscar René Serrano accepted the leadership of the club, and with his experience, undertook the task of giving new life to the "Scorpions". The club ascended to the segunda división, changing their name from C.D. Alacranes to Club Deportivo Chalatenango.
In 1990, C.D. Chalatenango were relegated to the segunda división. They stayed in the segunda división battling promotion for 13 years until they won promotion in 2003, but a year later they were relegated again. However they were able to quickly return to the Primera División de Fútbol Professional by purchasing the spot of Coca-Cola for $250,000.
In the 2008 Apertura, Chalatenango reached the final for the first time in the club's history under the direction of Carlos Melendez. After a 3–3 draw in normal time, they lost 4–3 on penalties, which allowed Isidro Metapán to become champions for the second time. The team qualified for the 2009–2010 CONCACAF Champions league knockout phase based on their record in apertura and clausura. 0n 26 June 2009, due to financial trouble, sold their spot in the Primera División de Fútbol Profesional to Municipal Limeño. Because the club failed to fill out the necessary paperwork to compete in the Second Division before the 7/23/09 deadline, C.D. Chalatenango did not compete during the 2009–2010 season. At the time, the club owed its former players $17,000 in unpaid salaries, and it owed CONCACAF $7,500 for pulling out of the CONCACAF Champions League. At the end of 2009, some of Chalatenango's former players created a new team, merging it with Nejapa FC to establish Alacranes del Norte.
In 2010, the club filed the necessary paperwork to be able to compete in the Second Division.
In 2012, The club merged with Vendaval to form Chalatenango-Vendaval and they played in the second division. However after one season, In 2013 the partnership between Chalatenango and Vendaval ended and they split into two teams again, with Vendaval remaining in the Second division while Chalatenango descending down a level to play in the third division.
Chalatenango's biggest rivalry was with fellow Chalatenango based but now defunct team Alacranes del Norte, against whom they contest the derby chalateco. The rivalry stems from Alacranes del Norte 's relocation from Nejapa to Chalatenango and using the same colours and stadium as Chalatenango.