The club was founded after a businessman called Amadeu Horn gave football kits to a group of boys. The boys played a match against a team called Humaitá, and won. On September 1, 1923, at Amadeu Horn's house, the club was founded, known as Avahy Football Club at the time. The team was named Avahy after the Battle of Avay, in the Paraguayan War. In the following year, it became the first Santa Catarina State Championship champion.