Background: SC Dynamo Berlin (1954–1966)

BFC Dynamo started as a football department of sports club SC Dynamo Berlin. SC Dynamo Berlin was founded on 1 October 1954 as one of the new elite sports clubs in East Germany. The sports club was affiliated to sports association SV Dynamo.

The new sports club SC Dynamo Berlin became a center of excellence () of sports association SV Dynamo. In order to establish a competitive side in Berlin, the team of SG Dynamo Dresden and its place in the DDR-Oberliga was transferred to the new sports club SC Dynamo Berlin. The relocation was designed to give the capital a team that would rival teams from West Berlin, such as Hertha BSC, which were still popular in East Berlin. The team played its first match as SC Dynamo Berlin against BSG Rotation Babelsberg in the 1954-55 DDR-Oberliga on 21 November 1954. Among the players delegated from SG Dynamo Dresden were Johannes Matzen, Herbert Schoen and Günter Schröter. SC Dynamo Berlin finished its first season in the DDR-Oberliga in seventh place, ahead of local rival ZSK Vorwärts Berlin. ZSK Vorwärts Berlin had been relocated to East Berlin in a similar way one year before. SC Dynamo suffered relegation to the second tier DDR-Liga after the 1956 DDR-Oberliga, but immediately bounced back.

Schröter would remain a central player to the team into early the 1960s, but most other players of the former SG Dynamo Dresden team had aged by the late 1950s. The team was now shaped by a new generation of players, including Martin Skaba, Werner Heine, Waldemar Mühlbächer, Hermann Bley and Konrad Dorner. SC Dynamo Berlin finally won its first trophy in the 1959 FDGB-Pokal. However, the German Football Association of the GDR () (DFV) stopped the team from participating in the 1960–61 European Cup Winners' Cup, in favor of ASK Vorwärts Berlin.

SC Dynamo Berlin had some success in the first seasons of the 1960s. The team fished the 1960 DDR-Oberliga as runner-up and was a top team also in the 1961-62 DDR-Oberliga. The team participated in the 1961–62 International Football Cup. However, SC Dynamo Berlin found itself overshadowed in the capital by the army-sponsored ASK Vorwärts Berlin. The team of SC Dynamo Berlin during the 1960s would eventually prove relatively weak. By the end of the 1962–63 DDR-Oberliga, SC Dynamo Berlin had become a lower table side.

As part of a general reorganization of East German football during the winter break 1965–1966, the football department of SC Dynamo Berlin was separated from the sports club and reorganized as football club BFC Dynamo.

Founding and rise (1966–1978)

BFC Dynamo was founded on 15 January 1966. Manfred Kirste was elected club chairman and the SV Dynamo President Erich Mielke was elected honorary chairman. Kirste came from Berlin and was a certified sports teacher.

The new designated football clubs (FC) were formed as centers of excellence in East German football, with the right to draw on talents within designated geographical and administrative areas. BFC Dynamo was initially assigned Bezirk Cottbus and one third of East Berlin as catchment area. BFC Dynamo was officially a club of the Ministry of the Interior and the club's official sponsor was the Volkspolizei. However, the Honorary chairman Mielke was the head of the Stasi. BFC Dynamo would come to receive personal, organizational and financial support from the Stasi.

BFC Dynamo struggled in the 1966-67 DDR-Oberliga and was again relegated to the DDR-Liga. The club began a rejuvenation of the team during the 1967–68 season. Among the players from the youth department who got to play matches in the 1967-68 DDR-Liga Nord were Harald Schütze, Norbert Johannsen and Werner Voigt. The team dominated the 1967-68 DDR-Liga Nord and immediately won promotion back to the DDR-Oberliga. Hans Geitel became new coach during the winter break 1968–1969. Geitel had previously worked in the youth academy. More players from the youth department were integrated into the first team in the late 1960s and early 1970s, such as Peter Rohde, Frank Terletzki and Bernd Brillat. BFC Dynamo reached the final of the 1970-71 FDGB-Pokal. The team lost the final 1–2 in overtime to SG Dynamo Dresden, but qualified for the 1971-72 European Cup Winners' Cup as runner-up.

The football landscape in East Berlin changed dramatically ahead of the 1971–72 season, when the Ministry of Defense decided to relocate FC Vortwärts Berlin to Frankfurt an der Oder. BFC Dynamo and 1. FC Union Berlin were from now on the only major football clubs in East Berlin. BFC Dynamo was allowed to take over the catchment area in East Berlin that had previously belonged to FC Vorwärts Berlin. The team would also get the opportunity to play more matches at the larger and more centrally located Friedrich-Ludwig-Jahn-Sportpark in Prenzlauer Berg, which led to increased interest in the club and growing attendance numbers.

BFC Dynamo stood out among other teams within SV Dynamo. The team was located at the frontline of the Cold War. It was also a representative of the East German capital. This meant that the club had to be well equipped. BFC Dynamo would eventually get access to a nationwide scouting network, which included numerous training centers () (TZ) of SV Dynamo. BFC Dynamo would eventually be able to recruit young talented players from 38 training centers (TZ) across East Germany. By comparison, 1. FC Union Berlin only had access to 6 training centers (TZ) in the Berlin area.

The team was joined by forward Wolf-Rüdiger Netz from SG Dynamo Schwerin in 1971. BFC Dynamo finally got to make its first appearance in an UEFA Competition in the 1971-72 European Cup Winners' Cup. The team managed to reach all the way to the semi-finals. BFC Dynamo thus became the first team from Berlin to reach the semi-finals in one of the two most prestigious UEFA club competitions (the European Cup and the European Cup Winners' Cup). BFC Dynamo was eventually eliminated by Dynamo Moscow in the semi-finals, after a penalty shoot-out at the Druzhba Stadium in Lviv in the return leg .

Harry Nippert (de) became the new coach in 1973. Nippert had played for SC Dynamo Berlin and had previously served as assistant to SG Dynamo Dresden coach Walter Fritzsch. BFC Dynamo also recruited experienced attacking midfielder and national team player Reinhard Lauck from relegated 1. FC Union Berlin the same year. BFC Dynamo established itself as a top team in the DDR-Oberliga in the mid-1970s. Talented players from the youth department were continuously integrated into the first team. BFC Dynamo had the youngest team in the league in the 1975-76 DDR-Oberliga, with an average age of 22.5 years. The team moved its home matches to the Friedrich-Ludwig-Jahn-Sportpark in 1975. BFC Dynamo finished the 1975-76 DDR-Oberliga as runner-up. The season saw several big wins and attendance numbers. The young team under Nippert had achieved a goal difference of 67–24.

Reinhard Lauck and young forward Hans-Jürgen Riediger won gold medal with the East Germany national football team at the 1976 Summer Olympics in Montreal. Local rival 1. Union Berlin was back in the DDR-Oberliga in the 1976–77 season after three seasons in the DDR-Liga. BFC Dynamo lost both meetings with Union Berlin in the 1976-77 DDR-Oberliga at the Stadion der Weltjugend. However, the loss in the return match would be the last ever defeat to 1. FC Union Berlin in the DDR-Oberliga.

30-year-old Jürgen Bogs became the new coach in 1977. Bogs had a background as a youth coach in the club. He had led the BFC Dynamo Junior team to a second place in the 1974–75 and 1975–76 East German Junior championships. Martin Skaba continued as assistant coach. BFC Dynamo finished its first league season under Bogs in third place.

Golden era (1978–1989)

BFC Dynamo had developed a very successful youth academy. Numerous players from the youth department were integrated in the first team during the 1970s. The average age in the team was only 22.7 years at the start of the 1978–79 season. Among the young talented players in the team were Hans-Jürgen Riediger, Lutz Eigendorf, Norbert Trieloff, Michael Noack, Roland Jüngling, Rainer Troppa, Bodo Rudwaleit, Ralf Sträßer, Hartmut Pelka and Arthur Ullrich. The veterans in the team were Frank Terletzki, Reinhard Lauck, Wolf-Rüdiger Netz and Bernd Brillat. The young team was coached by 31-year-old Jürgen Bogs. BFC Dynamo under Bogs played an aggressive football that focused on attacking.

BFC Dynamo was qualified for the 1978-79 UEFA Cup. The team was drawn against Yugoslav powerhouse Red Star Belgrade in the first round. BFC Dynamo won the first leg 5–2, but was eliminated after a 3–1 loss in stoppage time in the return leg. The 1978–79 season marked a shift in East German football. BFC Dynamo had a very successful start in the 1978-79 DDR-Oberliga and was in first place after the first half of the season. Lutz Eigendorf defected to West Germany on 20 March 1979 in connection with a friendly match in Kaiserslautern. His defection was considered a slap in the face of the East German regime; Eigendorf had been one of the most promising players in East Germany. BFC Dynamo played 1. FC Magdeburg in the final of the 1978-79 FDGB-Pokal in front of 50,000 spectators at the Stadion der Weltjugend. The team was defeated 0–1 in extra time. BFC Dynamo eventually won its first DDR-Oberliga title after defeating rivals SG Dynamo Dresden 3–1 on the 24th matchday in front of 22,000 spectators at the Friedrich-Ludwig-Jahn-Sportpark, 26 May 1979. The team broke several league records during the 1978–79 season, such as: most number of matches won since the start of a season (10), most number of unbeaten matches since the start of a season (22), most goals scored in one season under the current format (75) and the biggest win in the DDR-Oberliga in the last 30 years (10–0 against BSG Sachsenring Zwickau on the 17th matchday). Hans-Jürgen Riediger became second best goalscorer in the league with 20 goals.

BFC Dynamo made its debut in the European Cup in the 1979–80 season. The team reached the quarter-finals of the 1979–80 European Cup, where it faced Nottingham Forest under Brian Clough. The team won the first leg 0–1 away, after a goal by Riediger. BFC Dynamo thus became the first German team to defeat an English team in England in the European Cup. However, the team lost the return leg 0-2 and was eliminated on goal difference. BFC Dynamo was one point behind leading SG Dynamo Dresden heading into the final matchday of the 1979-80 DDR-Oberliga. The team defeated SG Dynamo Dresden 1–0 in the final matchday in front of 30,000 spectators at the Friedrich-Ludwig-Jahn-Sportpark and won its second consecutive league title.

The East Germany national football team won silver medal at the 1980 Summer Olympics in Moscow. BFC Dynamo was represented by five players in the squad: Bodo Rudwaleit, Artur Ullrich, Norbert Trieloff, Frank Terletzki and Wolf-Rüdiger Netz. All five played in the final against Czechoslovakia. Joachim Hall became the new assistant coach in 1980. Hall had played for SC Dynamo Berlin and BFC Dynamo between 1963 and 1972. BFC Dynamo was in first place in the league heading into the final matchday of the 1980-81 DDR-Oberliga, with the same number of points as second-placed FC Carl Zeiss Jena. BFC Dynamo defeated FC Carl Zeiss Jena 2–1 in the final match day and won its third consecutive league title.