Originally part of the South Wales Railway on the main route from London before the construction of the Severn Tunnel; today it is an important link between the West Midlands and South Wales.

Although Caldicot and Severn Tunnel Junction stations are only 3⁄4 mile (1.2 km) apart, Caldicot's growth as a dormitory for the new Llanwern steelworks kept it open in 1964 when other small stations were closed under The Reshaping of British Railways.

Severn Tunnel Junction had important roles at this time as the junction for the Severn Tunnel, the large coal marshalling yards and a new diesel depot, replacing the previous steam locomotive depot.

Severn Tunnel Junction also serves the village of Rogiet and is where this line merges with the South Wales Main Line through the Severn Tunnel, so it is also a stop on the Cardiff Central-Bristol Temple Meads-Taunton/Penzance service.

In 1977 the Parliamentary Select Committee on Nationalised Industries recommended considering electrification of more of Britain's rail network, and by 1979 BR presented a range of options to do so by 2000.