The narrow gauge railroad ran between Nevada City and Grass Valley.

The Central Pacific Railroad was the first railroad to enter Nevada County as it constructed eastward in 1865. At the base of the eastern slope of Donner Pass, the railroad established a construction camp, now known as Truckee, before following the Truckee River to the Nevada state line. Truckee became home to expansive locomotive facilities for helper locomotives on trains westbound over Donner Pass after the completion of the Transcontinental Railroad. Through the end of the 19th century, additional railroads were constructed, bringing the outside world closer to the remote corners of the county. Railroads like the Nevada County Narrow Gauge Railroad and Nevada County Traction Company served the gold rush-era boomtowns of Grass Valley and Nevada City. Lumber companies like the Towle Brothers and the Sierra Nevada Wood & Lumber Company brought rail into the forests and filled the demand for lumber throughout the region.