Curtis Crowe, later drummer for Pylon, was the renter of the space, and the first band to perform for an audience in the space was Crowe's Strictly American. As a continuous performance space, the club began as the practice room for Pylon and got its name from the single 40-watt light bulb the room had. The original loft space was above the offices of the University of Georgia newspaper, The Red and Black. Crowe and partner Paul Scales moved across the street to a space above a sandwich shop eighteen months later. With new partner Steve Allen, Scales migrated the club to a larger space on West Clayton Street. Amenities such as a stage and hot water were added, as was a second bathroom. True to the 40 Watt method it was assembled with found materials (including toilet and sink) and volunteer labor.
Doug Hoescht bought the club from Allen and Scales and moved it to 382 E. Broad Street and renamed it "40 Watt Club Uptown". The 40 Watt Uptown was large and professional, and it was a major stop for underground independent music acts in the 1980s. When rents increased on the space, the club moved back to its Washington Street location ("the new old new 40 Watt"). At the same time, the formerly small, spare competing club, The Uptown Lounge, expanded to a much larger space (the Georgia Theater). Therefore, with Uptown Lounge taking over as the high-capacity venue there was again a market for a small club that would focus on local acts. At around the time of the transition from uptown to the original location, the music video for REM's "Turn You Inside Out" was filmed in the Washington St. 40 Watt Club. The 40 Watt Club has remained at its Washington Street address since the closing of the Broad Street location. The 40 Watt Club is currently owned and operated by Barrie Buck, the former wife of R.E.M. guitarist Peter Buck, who has managed the club since 1987 and who retained the venue following the couple's divorce in 1994.
The 40 Watt Club was the primary performance space for numerous "Athens bands", including Pylon, R.E.M., Drivin' and Cryin', Guadalcanal Diary, The Primates, Indigo Girls, Modern Skirts and others. Its DIY ethos and informality were instrumental in the fostering of punk rock and a "scene" in Athens, GA. In more recent years, the club has been the home-base for such nationally-renowned local bands as Of Montreal, Drive-By Truckers, and The Whigs.