The team was founded as Sport-Club Jugendkraft 1903 and again as SG Karl-Marx Babelsberg in 1948 as successor to the pre-war side SpVgg Potsdam 03.

Playing as SV Nowawes the team gained promotion in 1935 to the first tier Gauliga Berlin-Brandenburg, one of sixteen top flight divisions formed in the re-organization of German football under the Third Reich.

The club returned to the Gauliga as SpVgg Potsdam in 1943 and earned third- and fourth-place finishes in the two years before the end of World War II.

SV fielded strong sides and achieved several top three finishes until they were promoted to the Regionalliga Nord (III) for the 2007–08 campaign.

Babelsberg 03 have a fierce rivalry with nearby club Energie Cottbus, a faction of whose supporters hold far-right political views.

The club's honours: Note: Flags indicate national team as defined under FIFA eligibility rules; some limited exceptions apply.