The company was administratively subdivided into eight regional directorates (Reichsbahndirektionen) with headquarters in Berlin, Cottbus, Dresden, Erfurt, Greifswald, Halle, Magdeburg, and Schwerin.

By 1989, 17.2% of the passenger transport volume in the GDR was handled by the DR – three times the market share of the Deutsche Bundesbahn (DB) in West Germany.

Fares were fairly cheap, but trains tended to be overcrowded and slow, owing in part to the poor condition of most railway lines in the GDR.

One reason for this was due to the generally poor customer service offered at the DR's ticket counters [citation needed].

Had the DR been renamed, for example, Staatseisenbahn der DDR (State Railways of the GDR) along the lines of other East German institutions, the Western Allies would probably have refused to recognise it as the same or a successor organization and removed its right to operate in West Berlin.[speculation?

][citation needed] The legal necessity of keeping the term 'Deutsche Reichsbahn' explains the unique use of the word 'Reich' (with its Imperial and Nazi connotations) in the name of an official organisation of the communist GDR.

This quasi-official presence in West Berlin was apparently of an utmost importance to the GDR regime, otherwise it is hard to explain why the anti-imperialist and cash-strapped GDR government was willing to both continue using the word 'Reich' and incur large hard currency deficits to operate and maintain the West Berlin railway system.

The DR also operated the S-Bahn local train service in West Berlin during much of the Cold War period.

Following the reunification in October 1990, the arrangements were kept until the creation of Deutsche Bahn AG on 1 January 1994 when the new company took over all S-Bahn operations in the Greater Berlin region.

The Federal Ministry of Transport (Bundesverkehrsministerium) proposed a comprehensive reform of the German railway system (Bahnreform) which was approved by the Bundestag in 1993 and went into effect on 1 January 1994, that included the planned merger between the DR and DB on 1 January 1994 to form the Deutsche Bahn Aktiengesellschaft or AG (Corporation), which is a state-owned limited stock company.

(1) Was also GDR Minister of Transport during his term of service as Director General of the DR. Dürr was also concurrently chairman of the board of the DB.