The club was founded in 1959, currently competes in Latrobe Valley Soccer League (LVSL) and is regularly referred to as Pegs.
In 2000, the club recruited former Morwell Falcons striker Carlo Villani, who scored 17 goals in his first season with Pegasus to help guide them to promotion from the Victorian State League Division Three South-East.
During the 2015 Australia Cup, Pegasus achieved their most significant result at a national level by defeating top-tier NPL Victoria side Murray United FC 6–2.
Morwell Pegasus was the junior club of John Hutchinson, who was the A-League all-time games record holder when he retired in 2014 - and remains the Central Coast Mariners all-time games record holder, with 271 appearances.
[3][4] The club plays its home matches at Ronald Reserve in Morwell, on an oval that is placed in the middle of a disused cycling track.