The club was founded in January 1957 by brothers Héctor and Julio Humberto Grondona. Its jersey is light blue with a diagonal red band (roughly resembling the jersey used by River Plate); the colors were chosen to symbolize the union of the two bigger clubs in Avellaneda: Racing (light blue) and Independiente (red).
Julio Grondona went on to become the president of Independiente, and then, starting 1979, president of the Argentine Football Association, a post he still holds. He is also a vice-president of FIFA. Brother Héctor, and then son Julio Ricardo, followed him as presidents of Arsenal.
The club's best-known player is Jorge Burruchaga, who started his career in the club in 1979, and coached the team from 2002 to 2005. Burru is best known for having scored the winning goal for Argentina in the 1986 World Cup final against Germany.
Arsenal was promoted to successively higher divisions in 1962, 1986, 1992, and reached the top division in 2002. The club reached the quarter finals of the edition of the Copa Sudamericana.