FC Energie Cottbus can trace its roots back to a predecessor side of FSV Glückauf Brieske-Senftenberg, a club founded by coal miners in 1919, in what was then called the town of Marga. FV Grube Marga, as the club was called back then, was active until 1924 when the miners left to form a new team called SV Sturm Grube Marga which was banned by the Nazi Party in 1933.
The club re-emerged after World War II in 1949 as BSG Franz Mehring Grube, becoming BSG Aktivist Brieske-Ost in 1950. The club was renamed SC Aktivist Brieske-Senftenberg in 1954 and played in the DDR-Oberliga generally earning mid-table results until calamitously falling all the way to the fourth tier Cottbus Bezirksliga in the early 1960s. The players of this side formed SC Energie Cottbus in 1963, whilst the reserve team merged back to BSG Aktivist Brieske-Ost to form BSG Aktivist Senftenberg. The club still exists as FSV Glückauf Brieske-Senftenberg today. SC Cottbus was quickly assisted by a wholesale transfer of players from BSG Aktivist Brieske-Ost ordered by the East German authorities, who often intervened in the business of the country's sports and football clubs for political reasons. East German authorities had a penchant for tagging sports teams with the names of socialist heroes: Franz Mehring was a German socialist politician and journalist.
In the mid-60s a re-organization program by the regime led to the separation of football sides from sports clubs and the creation of BSG von Bodo Krautz under the patronage of a local coal mine. The football club went by that name only briefly and was quickly renamed BSG Energie in early 1966.
After years as a II division or lower-table I division side in East Germany, Energie has emerged as one of the few former DDR sides to enjoy relative prosperity in a united Germany. After six seasons playing tier III football, they earned promotion to the 2. Bundesliga in 1997, winning the Regionalliga Nordost, and then played their way into the Bundesliga in 2000, where they managed a three year stay. A key player in their Bundesliga run was Vasile Miriuţă, an imaginative midfield player who played a big part in the team's promotion. After being relegated, Energie narrowly missed a prompt return to the top tier, losing out to 1. FSV Mainz 05 on goal differential. In season 2004–05 Energie struggled into both financial (reported debts of €4.5 million) and sports problems: the season goal of promotion was missed by far – the club escaped the relegation to third tier Regionalliga by scoring one more goal (season overall) than SV Eintracht Trier 05 while having the same amount of points and goal differential. During season the manager and the chairman were replaced. Next season (2005–06) was a much more successful one – the club returned to play in the First Division Bundesliga after winning promotion.
The Bundesliga season 2006–07 resulted in a 13th place and a club record in Bundesliga season points (41). Energie Cottbus was the only club from East Germany playing in the Bundesliga until 1. FC Nürnberg knocked the team out on 1 June 2009. Cottbus remained in the 2. Bundesliga for another five seasons until 2014 when an 18th place finish meant relegation to the 3. Liga, ending a seventeen season stint in the Bundesliga and 2. Bundesliga.
German Chancellor Angela Merkel is an honorary member of the club.
On 6 April 2001, Energie became the first Bundesliga club to field a side made up of 11 foreign players. Energie often fielded 9 or 10 foreigners that season: German players appeared a total of just 83 times, with striker Sebastian Helbig as the leader with 28.