Passenger service through the tunnel ceased in 1940 with the decline of the Northwestern Pacific interurban system, although freight traffic still continued along the line.

Then in the late 1970s, the County of Marin purchased an additional part of the right of way from Southern Pacific, but left the Alto Tunnel in their hands.

Two years later, part of the tunnel collapsed, destroying a house and multiple underground utilities in the process.

[1] In 1994, the Marin County Department of Parks and Open Space made the decision to hire Brady and Associates to assess the tunnel's viability as a bike path.

[10] The original tunnel supports were made of redwood timber, specifically 10in by 14in sets in a 7-segment configuration spaced 1–5 ft apart.

The tunnel was dug through rock of the Franciscan group, consisting mainly of sandstone, conglomerates, and shales.