The club was founded in August 1970. Gathering funds from 20,000 subscribers the founding marked the reappearance of a major club in Paris. The driving forces were Pierre-Etienne Guyot of Racing-Club de France and the owners of Sangermanois. The union of R.C. Paris and Sangermanois resulted in Saint-Germain-en-Laye. The new club played in the Nationale (second) division for the 1970-71 season. The club won the division and was promoted to the top division in their first season.
After finishing 16th in 1971-72 the club split in May. The Sangermanois half the club joined C.A. Montreuil and remained in the top division as Paris F.C., the rest of the club was relegated to D3 as amateur side Paris Saint-Germain. PSG was promoted to D2 in 1972-73, as champions following the disqualification of Quevilly. The following season the club returned to professional status and finished second in the league, winning promotion to the top division in a play-off with Valenciennes. In a pleasing symmetry for PSG supporters, Paris F.C. were relegated in that season.
The club has remained in the top division since 1974, winning the league twice, in 1985-86 and in 1993-94. The club has also won the Coupe de France five times (1982, 1983, 1993, 1995, and 1998). In Europe the club won the Cup Winners' Cup in 1996 and has had a number of good runs in the Champions League, but never beyond the semi-finals.