The site that now forms the station at Derby Castle is so called because the area to the north at that time housed the vast entertainment complex of the same name.

The enterprising railway, initially titled the Isle of Man Tramways & Electric Power Company, owned the entire site, including the row of houses at Strathallan Crescent and the horse tram sheds and offices above.

This was the site of the power station to generate the required current to run the trams, and also served the first electric lamp standards on the island from 1897 in the nearby village of Onchan.

The public house next to the station, which is now called the "Terminus Tavern", was built in 1890 as the Strathallan Lodge, later becoming a hostelry and remained so[clarification needed] until 1982 when it was given its current name.

The canopy, although erected by the railway, provided cover for the tramcars of the Douglas Bay Horse Tramway which also terminates here; the canopy originally featured detailed and intricate metalwork culminating in a central clock tower, distinctive on many early views, but latterly this was removed and a plain roof replaced it.

It also formed a shelter beside the main pedestrian entrance to the Derby Castle complex, demolished in 1965 to make way for the ill-fated Summerland leisure centre.

At one time it was common to park a spare tramcar on the "Groudle Siding" for shelter, and later a decommissioned Leyland National bus served this role as well as a second hand Lisbon tram.