The League of Wales was established by the Welsh Football Association in the summer of 1992. The purpose behind the setting up of the League was to develop the game in Wales at both grass-roots and club level, and to ensure that Wales could continue as an independent nation on the world's footballing stage. Although there had been "national" leagues at amateur and semi-professional level throughout the game’s history in Wales, the creation of the League of Wales meant that, for the first time in the history of Welsh football, a truly National League, fully recognised by UEFA, European football’s governing body, had been established.

The inaugural League of Wales comprised of a combination of the best teams from the various Welsh regional leagues, such as Cwmbran Town and Aberystwyth Town, and Welsh clubs who had been operating in the English non-League system, such as Bangor City and Newtown. At first, Barry Town, Rhyl and Caernarfon Town refused to leave the English non-League system, but seeing the potential that the League of Wales had to offer, they too joined in subsequent seasons. At first, the standard of football and facilities in the League left a lot to be desired, but in less than a decade, standards have risen dramatically. Clubs operating in or entering into the League now have to meet strict stadium criteria, and clubs have spent large sums of money redeveloping their facilities in order to meet these criteria, and also to expand on their existing facilities, thanks to the lure of European football.

Prior to the setting up of the League of Wales, the only route into European football was by winning the Welsh FA Cup. The League of Wales now offers places in European cup competitions for four Welsh clubs every season, i.e. the European Champions League, two places in the UEFA Cup, and the Inter-Toto Cup. The prize of representing Wales in Europe, and the financial rewards that it brings, is one of the main reasons why the standard of football in the league has risen so dramatically in such a short space of time. Comparisons are always being made between the League of Wales and the English non-League, but as a national league, the LoW needs to be compared to other European national leagues in order to judge the standard that it is are currently at. In the 1998-99 season, the UEFA rankings saw the League of Wales placed in 43rd position out of 50 European leagues. Most significantly, the LoW was placed higher than the Republic of Ireland, which, in such a short space of time, is a phenomenal achievement.

The growing status which the League of Wales now enjoys is reflected in some of the major sponsorship deals which clubs have attracted over the past couple of seasons. The 1998-99 season, in particular, saw many of the top clubs in the league attracting bigger sponsorship deals than some clubs operating in the English Nationwide League, including Cardiff City, who are always regarded as the premier club in Wales. At a time when the League of Wales enjoys considerable TV coverage, and when its clubs play against the likes of Dynamo Kiev, Glasgow Celtic, Widzew Lodz and National Bucarest on a regular basis, it’s easy to see the attraction.