On 13 August 1865, the lower house of the parliament of Württemberg (württembergische Abgeordnetenkammer) finally approved the construction of a line from Herbertingen via Saulgau, Aulendorf, Waldsee, Kißlegg and Leutkirch to Isny.

After the Leutkirch–Memmingen railway was opened in 1889, the section from Leutkirch to Isny lost its importance in terms of traffic and was consequently reclassified as a branch line in 1890.

The last section was always lightly used as few passengers used its en route stations, all three of which were at some distance from the settlements they were intended to serve: In addition, the terminus in Isny was about 900 metres from the market square.

The last section became more important, at least for freight traffic, when the Wehrmacht began to build the Urlau ammunition factory near the line in the Urlauer Tann forest in 1935.

The best-known train on the line was the Kleber-Express, a Heckeneilzug ("hedge express", that is a service that stops at every station in rural areas) from Freiburg to Munich, which ran from 1954 to 2003.

On 1 June 1969 with the beginning of the summer timetable, passenger traffic between Leutkirch and Isny was discontinued and taken over by Bahnbus, the bus division of Deutsche Bundesbahn.

Immediately after the line was cut back, Deutsche Bundesbahn began to build a loading point a little south of Urlau station for military traffic.

In October 2006, the Initiative Allgäubahn was founded to campaign for improvements to the perceived inadequate basic two-hour interval service for the cities and municipalities on the Württemberg Allgäu Railway and the Kißlegg-Memmingen line.

Baden-Württemberg's new Minister of Transport, Winfried Hermann has continued to finance the additional services that are required because of the loss of revenue due to the failure of tilting technology, among other things.

In the 21st century, freight transport has been limited mainly to the delivery of raw materials for the Saint-Gobain glass plant in Bad Wurzach, with trains continuing over the Roßberg Railway.