It has been reported in to be contrasted papers that football was first taught in Albacete by John Hulse, an English Engineer of the Lancashire and Yorkshire Railways Company, establishing the foundation of Locomotoras Albacete, after the same-named steam locomotive factory in the city, owned by the Goicoechea family, owners of Talgo. Thus, like in Swindon, football in Albacete is originally linked to the railway industry. After years of amateur and regional development of football, it would not appear formally in the shape we know until the end of the Spanish Civil War. The club was founded in 1940 under the name Albacete Fútbol Asociación, being later changed in an attempt to make it sound "more Spanish". At the second division in 1985–86, repeating the feat five seasons later. In 1989, Benito Floro consecutively promoted the club from the third division to La Liga, overachieving for a seventh place in the first season in the top level. Floro would later coach Real Madrid, returning to Alba two seasons later as the club was relegated in 1995–96. After years in the second division facing serious economic and sporting difficulties, Albacete returned to the top flight in the 2002–03 campaign, led by César Ferrando. However, Albacete dropped in 2004–05 after posting just 6 wins from 38 matches, going on to stabilize in the subsequent seasons in the second level. The 2010–11 season brought two coaching changes, with both Antonio Calderón and David Vidal being fired, as Albacete returned to the third division after 21 years. That season the club finished last in Segunda División with only 32 points in 42 matches. On 6 December 2011, Andrés Iniesta – who played for the club in his youth before joining Barcelona – became the club's major shareholder, donating €420,000 to the cash-strapped club. The club managed to reach the round of 16 of the 2011–12 Copa del Rey, notably beating Atlético Madrid 3–1 on aggregate. In March 2013, Agustín Lázaro, chief executive officer of Andrés Iniesta's winery enterprise, was appointed as Albacete's chairman. In June, Iniesta loaned the club a further €240,000 to cover unpaid wages, thus preventing its administrative relegation to the fourth tier. In 2014, Albacete returned to the Segunda División, but was relegated two seasons later after finishing the season in the 21st position. The club again returned to the Segunda División in the 2016–17 season after winning against Valencia Mestalla in the last round of the promotion play-offs. Albacete finished the 2018-19 season in 4th position of the Segunda División, but then lost to RCD Mallorca in the La Liga play-offs and remained in Segunda División for the 2019-20 season.
The club plays its home matches at the Estadio Carlos Belmonte, which has an all-seated capacity of 17,524. Originally built in 1960, the stadium underwent two major redevelopments, the last being in 1998.
