The origin of the club dates back to the 1930s, when it was named Sport Club Pacense. They played for two decades without any official recognition until they entered the lower divisions in 1950, under the name Futebol Clube Vasco da Gama. The club then changed their kit colours to the current ones and renamed themselves Futebol Clube Paços de Ferreira.
Their first match under the current name came on 19 November 1950, beating Lousada 2–1. Agostinho Alves was the first goal scorer in the history of the Pacenses. The club then played in Portugal's third regional division until the 1956–57 season, where they were crowned champions. The club crest was created in 1961–62, and was used ever since.
The club was relegated and then promoted again and supporters hit the streets of the city on 17 June 1973 when they defeated Perosinho 3–0. One year later, they won the third division championship on 14 June 1974, after defeating Estrela de Portalegre. The hero of the game was the goalscorer Mascarenhas.
Having finished last in the league in 2007–08, Paços would have normally been relegated to the second level, but was readmitted after Boavista's confirmed irregularities. In the following year, already without manager Mota, the team had a reasonably successful season: a comfortable 10th place in the league and a second Europa League qualification spot after losing the Cup of Portugalfinal 1–0 to eventual league champions Porto on 31 May. The two clubs met again on 9 August in the Super Cup, which Porto won 2–0.