In 1909, Merthyr Town joined the second division of the Southern League, which despite being primarily an English league, contained several other Welsh clubs, notably Cardiff City, Newport County and Swansea City. After finishing third in 1911-12 the club were promoted to the first division, though they were relegated back to the second division in 1913-14. The Southern League did not operate during World War I, and when it resumed for the 1919-20 season Merthyr were placed back in the top division.
In the summer of 1920 the Football League expanded with the creation of a new Third Division, which was comprised entirely of the First Division of the Southern League from the previous season. Despite having finished second bottom in season before, usually a relegation place, Merthyr became a new member of the Football League.
In their first season in the Football League, the club had a much better season and finished 8th. This, however, proved to be their most successful league season, and it was followed by a gradual decline: 11th in 1921-2 and 17th in 1922-3. The 1923-4 season saw a slight improvement in league form as they finished 13th, but the major news was their appearance in the final of the Welsh Cup, though they lost 1-0 to Wrexham in a replay after a 2-2 draw.
From then on the club declined further, and finished bottom of the Third Division in 1924-5. Although they finished 14th in 1925-6, in the following seasons the club finished 17th, 21st, 20th and then bottom again, and were eventually voted out of the Football League in 1930. They were replaced by the ill-fated Thames. During their penultimate season in the Football League the club had their best season in the FA Cup, getting past the first round for the first and only time, before losing to Watford in the second round.
The club dropped back into the Southern League, but lasted only four seasons, before ceasing to play in 1934.