The competition was first held during the 1990–91 season as the B&Q Centenary Cup[1] to celebrate the 100th anniversary of the formation of the Scottish Football League (SFL).

Every match, including the final, is a one-legged tie that lasts 90 minutes plus any additional stoppage time.

[11] In May 2024, it was announced the Cup would return to being Scottish-only for the 2024-25 season, with more Highland and Lowland League teams taking the place of the invited Northern Irish and Welsh clubs.

[12] The competition was created in the 1990–91 season to celebrate the 100th anniversary of the formation of the Scottish Football League in 1890.

This was reflected in high attendances at matches in the later rounds of the tournament including a full capacity crowd of 11,500 at Fir Park in the first final.

[25] From 2018–19, the competition was further expanded with the two highest ranked teams still remaining in England's National League to take part from the second round.

[26] The age level was raised for colts teams from under-20 to under-21 in a rule change introduced by the SPFL ahead of 2018–19 competition.

[28] The 2019–20 final, between Inverness Caledonian Thistle and Raith Rovers, was originally scheduled for 28 March 2020 but was postponed and later cancelled, with the teams sharing the title.

[28][29] Continuing restrictions on fans entering stadiums meant that the competition was unviable for most SPFL clubs, and the scheduled 2020–21 edition was cancelled in October 2020.

Three clubs have reached the final in successive seasons; Ayr United did so in the first two years of the tournament but lost both.

The only teams to have successfully defended their title are Hamilton Academical and the original Airdrieonians,[36] whilst Raith Rovers defended theirs uniquely, sharing their first with Inverness Caledonian Thistle in April 2021, due to the COVID-19 Pandemic cancelling the match, before defeating Queen of the South in the following final in 2021–22.

This has happened to Falkirk twice, Inverness Caledonian Thistle, St Mirren, Rangers and Ross County.

In 2019, Connah's Quay Nomads of Wales were the first non-Scottish side to reach the final of the Scottish Challenge Cup; despite taking the lead in the 21st minute, they eventually lost 3–1 to Ross County.

The winner of the tournament is decided by a final elimination match which lasts 90 minutes plus any additional stoppage time.

[1] The competition relies on revenue earned from sponsorship although it has been able to run without a sponsor over two periods but had to be suspended for one season in 1998–99 as a consequence.

[53] With the expansion of the competition to include teams from Northern Ireland and Wales from 2016 to 2017, additional contracts for live match coverage have been agreed with Premier Sports and S4C.