The club was formed by workers at the Royal Arsenal, Woolwich in 1886.

It was originally known as Dial Square and was so called because the founders hailed from a workshop of the same name. Dial square got its name from the sundial over the entrance to the workshop.

Included in the founding group were two former Nottingham Forest players, one of whom Fred Beardsley, wrote to his old club seeking help. They responded with a full set of red jerseys and a ball. The club was known as the "Woolwich Reds" by its fans although its official title was Woolwich Arsenal.