After being founded in 1955, Hapoel Ashkelon spent their first few decades in the lower leagues of Israeli football. 1995–96 they won Liga Alef South division and promoted to Liga Artzit (then the second tier) and in 1996–97, they achieved second successive promotion, to Liga Leumit (then the top tier) as Liga Artzit champions. However, the club finished bottom of the division, with a points deduction. In 1999–2000, they were relegated to the third tier (which became Liga Artzit following the formation of the Israeli Premier League as the top tier in 1999), before returning to the second tier (now Liga Leumit), after winning Liga Artzit in the 2004–05 season. The club reached the State Cup final for the first time in 2007, but despite taking the lead, lost 5–4 on penalties to Hapoel Tel Aviv after a 1–1 draw. At the end of the season, the club finished 11th and relegated to Liga Artzit.