As with many railroads in the region, the A&SAB began in the minds of timber investors and land developers seeking to access the agricultural resources of the Florida Panhandle and South Alabama.

Several military bases in the vicinity of Panama City ensured the Bay Line would remain a hotbed of activity for the duration of the war.

[3][page needed] The company offered sleeper and coach passenger train service nightly between Panama City and Atlanta Union Station via Albany and Macon.

[3][page needed] In 1989, Stone Container Corporation purchased from CSX Transportation a branch line from Grimes to Abbeville, Alabama.

[3][page needed] The Seaboard System Railroad, successor to the Louisville and Nashville, abandoned the line into Graceville on January 16, 1984.

[8] The A&SAB purchased the small yard and wye track in Graceville from the vacating Seaboard and continued serving the city.