FK Arendal was founded in 2000 as an umbrella team for the local clubs Arendal BK, FK Favør, IK Grane, Rygene IL, IL Sørfjell, IF Trauma, Øyestad IF and Hisøy IL. FK Arendal replaced Øyestad in the league system from the 2001 season. All the founding clubs still existed, however, and played in the league system - although Favør only had a women's section.
FK Arendal won promotion to the Second Division following a victorious 2003 season. Although relegated after one season, it was promoted back up for the 2007 season. The club was again relegated after only one season.