Although it has the characteristics of light rail, such as with the type of rolling stock used, it is more akin to a rapid transit system owing to its total grade separation and high passenger throughput.

First envisioned in a 1977 study conducted by Freeman Fox and Associates which suggested a street-level railway in Manila, the government revised this recommendation to an elevated system.

Although the line aimed to reduce traffic congestion and travel times in Metro Manila, the transportation system has only been partially successful due to the rising number of motor vehicles and rapid urbanization.

[12][13] A year later, public works secretary Alfredo Juinio announced that the system would consist of streetcars that were seen before the World War II, and they would accept bids for the project in the next few months.

[14] Following a review by the Ministry of Transportation and Communications, later the Department of Transportation (DOTr), the proposal was revised to an elevated railway to avoid building over the city's many intersections,[12] while the option for an underground line was rejected due to the high water table in Manila and has a half a meter below sea level;[15][16] this raised the project's cost from ₱1.5 billion to ₱2 billion.

An alignment along Rizal and Taft avenues, which spanned from Monumento, Caloocan in the north to Baclaran, Pasay in the south, was selected because it followed a relatively straight path for most of its route.

Additional funding was later sourced from a ₱700 million loan, provided by a Belgian consortium consisting of ACEC, La Brugeoise et Nivelles, Tractionnel Engineering International, and Transurb Consult.

The consortium also supplied the line's first light rail vehicles, power control, signalling, and telecommunications, as well as provided training and technical assistance.

Designed as a public utility rather than a profit center, the line was expected to incur a deficit through 1993, but complete its repayments within a period of 20 years.

However, during construction, it was determined that bored piles should be utilized in some areas to mitigate noise and avoid potential damage to nearby buildings.

[15] In 1981, an economic recession hit the country, and the government was unable to provide counterpart funds for civil works and right of way acquisition, which amounted to 60 percent of the project's total cost.

[18] In order to make way for Carriedo station and a segment of tracks approaching the Pasig River, a department store and a classroom building nearby FEATI University were demolished.

[20] In July 2000, with the looming expiration of its contract with the LRTA, a labor strike was launched by employees of Meralco Transit Organization (METRO, Inc.).

[24] JBIC extended an ₱8.893 billion loan for the second phase of the capacity expansion project,[25] which was initiated in preparation of the expected high demand by 2004 once the railway network in Metro Manila is completed with the full opening of the LRT Line 2.

[24] The joint venture of Sumitomo Corporation and Itochu was awarded the contract and was given the go-ahead in March 2005, paving the way for the project to move forward.

Package B, on the other hand, involves the procurement and installation of air conditioning units for the 1000 class trains, replacement of faulty air conditioning units of the 1100 class trains, renovation of 4 kilometers (2.5 miles) of railway track and railway sleepers, and procurement of equipment and spare parts used for track works.

[30] The joint venture of DMCI and First Balfour built the viaduct and the two stations,[31] while the electrical and mechanical systems contracts were assigned to different contractors.

A study about the integration of Metro Manila's railway network, published by JICA in 2001, proposes the through-operation of both LRT-1 and the MRT-3, which would have interoperability to create a seamless loop around the region.

Feasibility tests for this proposition included LRT-1 trains visiting MRT 3 depot facilities and running them on the entire line.

[43] De Jesus later resigned from the DOTC in June for personal reasons,[44] and his successor, Mar Roxas, halted the auction process and was later shelved.

[53] After this proposal was terminated on May 3, 2006,[54] the government worked with International Finance Corporation, White & Case, Halcrow and other consultants to conduct an open-market invitation to tender for the extension and for a forty-year concession to run the extended line.

[63] The project was subsequently rebidded and on September 12, 2014, the Light Rail Manila Corporation (LRMC) was awarded the 32-year concession to operate, maintain, and extend the line to Cavite.

[73][74] LRMC partnered with Bouygues for civil works,[75] Alstom for the installation of the signaling and communication systems,[76] and the RATP Dev Transdev Asia for the overall engineering, procurement, consultation, construction and assistance services.

[83] Responding to the ROW issues and difficulties faced by LRMC, a proposal was announced by businessman and former Senator Manny Villar in August 2023 to take over the extension project.

[85] The line is predominantly aligned to the path of Taft Avenue (Radial Road 2) which was chosen largely due to its straight course.

During Holy Week, a public holiday in the Philippines, the rail line is closed for annual maintenance, owing to fewer commuters and traffic around the metro.

Due to the high patronage of the line, part of the platform corresponding to the front car of the train is cordoned off for the use of women, children, elderly and passengers with special needs and/or disabilities.

[115][116][117] LRMC has also built an in-house laboratory for production, manufacturing, fabrication and repair of train parts that are no longer available in the market.

Based on a procurement plan published by the Light Rail Transit Authority, most of the signaling equipment, including track circuits, was supplied by ACEC.

Alstom was awarded a contract in February 2016 to supply its Atlas 100 ETCS Level 1 solution for the south extension and upgrade the existing system.