On November 24, 1949, a group of employees of Lloyd Aéreo Boliviano met to form a football club that would be identified with the company and become the pride of its workers. After two hours of debate, they founded the club with the name "San Jose de la Banda" in tribute to the area and the airport in Cochabamba. They proceeded to the election of the board, and appointed Justo Mancilla as club president. After some debate, blue and white were chosen as the team colors.
After the death of the company's first commercial pilot in Bolivia, Jorge Wilstermann, the name of the club was changed. In 1953, Captain Walter Lemma, manager of the company and partner of the deceased, suggested that both the airport and the team bear the name of the pilot, who had been very dear to the institution.
After the club's foundation, the leaders entered it in Cochabamba's Football Association (AFC) to compete in the second division. Wilstermann had no clear rival for first place and its good campaign forced it to seek to intervene[clarification needed] in the AFC championship, which was played in La Paz and Oruro between teams from those cities.
When Dr. Jorge Rojas was appointed Wilstermann's chairman, he changed its colors to red and blue. "I chose those colors because they mean force, ferocity, and total dedication in the field", he stated. It was also the only team in the country which used those colors.
In 1959, Wilstermann repeated as national champions, earning the honor to be the representative Bolivian side in the first edition of the Copa Libertadores de América in 1960. Their initial match pitted them against Peñarol of Uruguay. The Uruguyans defeated Wilster 7–1 in Montevideo, although the Bolivians drew their home game 1–1.
In 1960, Wilstermann won its third consecutive national title, an achievement that has not been equalled by any other Bolivian club.
In the 1961 Copa competition, Wilster played to a tie against Santa Fe, Colombia, winning 3–2 in Cochabamba and losing 1–0 in Colombia. The governing body decided to draw lots to determine which team would advance to the next round. "The draw was a fraud. After many years we learned that the full intention of the South American Football Confederation, which at that time was based in Bogota, was to eliminate Wilstermann and promote Santa Fe to the semis," claimed then Wilster club chairman, the late Jorge Rojas. The unsubstantiated story was that both of the pieces of paper that were put in the hat had Wilstermann's name. The team that was drawn was eliminated. "The Confederation official of that process confessed that he had been forced to proceed in this manner," recalled Rojas.
Wilstermann enjoyed a second "golden era" in the 1970s under the chairmanship of Alfredo Salazar. The Wilstermann team again won the national championships in 1972 and 1973. "They were spectacular years. Wilstermann had that mystique of a winning team: they did not like to lose ever, even less to a visiting side. Besides they were always on the attack and even achieved a historic 2–2 tie with River Plate in Buenos Aires," recalls Antonio Yanez, organization leader since 1975.
Following a period of club organizational turmoil and the founding of the professional football league of Bolivia, the Liga de Fútbol Profesional Boliviano, Wilstermann enjoyed its third "golden age", winning national titles in 1980 and 1981.
In the second phase, Wilstermann faced the formidable rosters of Deportivo Cali of Colombia and Flamengo of Brazil. They first tied the Colombian side 1–1 in Cochabamba, but fell 1–0 in Cali. The team from Rio de Janeiro defeated Wilster 2–1 at home, as well as in Maracanã, 4–1. While these results were disappointing, Wilstermann had accomplished what no Bolivian team had before. The Wilstermann sides of this era were highlighted by players such as Roger Perez, Carlos Trigo, Victor Villalon, Carlos Arias, Eduardo Navarro, Jhonny Villarroel, Freddy Vargas, Cesar Enriquez, Jairzinho, Gaston Taborga and Freddy Salguero.