The original line was opened in two stages, from the mainline junction at Carlsruhe to the town of Trentham, on 16 February 1880.

However, over the next seventy years, both traffic and the quality of line gradually degraded, until the last passenger service was replaced with a road coach in 1978.

After several years of restoration, trolley services commenced from Daylesford station to a temporary terminus located in the Wombat State Forest, a distance of 3.2 km, in the latter half of the 1980s.

[4] In August 2010, services over the first 5.4 km from Daylesford to Musk were reinstated after repairs to the damaged section through the forest, and the rest of the line through to Bullarto was reopened in December 2013.

[5] The railway operates every Sunday, with five return services to Bullarto and one to Musk on its regular time table.