The team was founded on 21 May 1978 by the merger of Cavancha and Estrella de Chile. The following year Iquique competed in the
Segunda División, winning it and securing promotion to the
Campeonato Nacional. In its first season at top level, the club finished in 14th place out of eighteen teams and won the
Copa Polla Gol, beating
Colo-Colo in the final at the
Estadio Nacional. Between 1981 and 1987, Iquique remained in mid-table positions. In 1988, they reached the qualifying stages of the
1989 Copa Libertadores after finishing in third place in the league. However, they lost to Colo-Colo in the final of the qualification tournament. That season,
Juan José Oré was the tournament's leading goalscorer with eighteen goals. In 1991, following a poor campaign where the team finished in the bottom of the table, they were relegated to the second division. They returned to the top flight for one season in 1993, and again for two seasons in 1997. However, in 2002, the club was relegated to the third division and then declared bankruptcy. It was relaunched as Municipal Iquique. During its four-year presence in the third division, the club saw the rise of Chilean international
Edson Puch, a key player in their title win of 2006. Two years later, Iquique reached its fourth promotion to the top division, beating
Coquimbo Unido in the promotion playoffs. During the
2009 Apertura, Puch was transferred to
Universidad de Chile and
Cristian Bogado to Colo-Colo. The club only obtained nine points during the second half of the season, and finished bottom of the table to be relegated to the second division. In 2010, Iquique won its third second division title and its second
Copa Chile title, securing qualification for the
2011 Copa Sudamericana. In their first ever continental tournament, the club was eliminated in the preliminary stage by
Universidad Católica. The team finished eleventh in the league. In 2012, Iquique participated in the Copa Sudamericana for the second consecutive time, qualifying with third place in the
2012 Apertura which saw the return of Puch and Bogado, signings including
Rodrigo Díaz and the emergence of
Álvaro Ramos as a strong player. However, once again the team were eliminated at the preliminary stage, this time by Uruguay's
Nacional after a 4–2 aggregate loss. That season, the club qualified for the Copa Libertadores after finishing third in the league. After beating Mexican side
León in the first stage, Iquique finished bottom of their group in the next stage. In 2014, Iquique won its third
Copa Chile, qualifying again for the Copa Sudamericana. For the third time, it was eliminated at the preliminary stage, with a loss to
Universitario de Sucre from Bolivia. In the
2014–15 season, Católica lost the title to
Cobresal on the final matchday after drawing 3–3 with Iquique, after Iquique had been losing 3–0 at half time. During the
2015–16 season they finished tenth in the annual table. ==Stadium==