Original Asics football shirt Vissel Kobe 2004

The club was founded in 1966 as the semi-professional Kawasaki Steel Soccer Club in Kurashiki, Okayama Prefecture. It was first promoted to the Japan Soccer League Division 2 in 1986, and stayed there until the JSL folded in 1992.

In 1995, the city of Kobe reached an agreement with Kawasaki Steel, the parent company, to move the club to Kobe and compete for a spot in the professional J.League as Vissel Kobe. Vissel is a combination of the words "victory" and "vessel", in recognition of Kobe's history as a port city. (Owing to its importance to the city of Kobe, Kawasaki Heavy Industries, parent company of former team patron Kawasaki Steel, remains a Vissel Kobe sponsor. Kawasaki Steel was eventually sold off to become part of JFE Holdings.)

Vissel Kobe began play in 1995 in the Japan Football League, a league below J.League, and the supermarket chain Daiei was slated as the club's primary investor.

In January 2004, Vissel was sold to Crimson Group, parent company of online merchant Rakuten, whose president is Kobe native Hiroshi Mikitani. Vissel's first signing under the Mikitani regime, İlhan Mansız, who was acquired partly to capitalize on his popularity during the 2002 FIFA World Cup hosted in Korea and Japan, was a massive failure – the Turkish forward played just three matches before leaving the team because of a knee injury. Mikitani also alienated supporters by changing the team uniform colours from black and white stripes to crimson, after his Crimson Group and the colour of his alma mater, Harvard Business School. The Tohoku Rakuten Golden Eagles, a baseball team also owned by Rakuten but based in Sendai, wear the same colours.

Vissel finished 11th in the league in 2004, the same position as the previous year, and finished 18th and last place in 2005, resulting in automatic relegation from J.League Division 1, or J1, to J2. During the two-year span, Vissel had five different head coaches. 2006 was Vissel's first season in J2 after nine years in the top division of soccer in Japan. They finished 3rd in the 2006 season and were promoted to J1 after beating Avispa Fukuoka in the promotion/relegation play-offs.