The Romantic poet Sándor Petőfi rode on the first train and wrote a poem predicting that rails would connect Hungary like blood vessels in the human body.

Following the Austro-Hungarian Compromise of 1867 that created the Dual Monarchy of Austria-Hungary, transport issues became the responsibility of the Hungarian Government, which also inherited the duty to support local railway companies.

This system resulted in lower prices for passenger trips and goods transport but it induced a rapid increase in both and so higher overall profits.

They also joined the zone tariff system, and remained successful until the end of World War I when Austria-Hungary collapsed.

The first-ever electric rail vehicle manufactured by Ganz Works was a 6 HP pit locomotive with direct current traction system.

The first Ganz made asynchronous rail vehicles (altogether 2 pieces) were supplied in 1898 to Évian-les-Bains (Switzerland), with a 37-horsepower (28 kW), asynchronous-traction system.

Italian railways were the first in the world to introduce electric traction for the entire length of a main line, rather than just a short stretch.

[7][8] In 1918,[9] Kandó invented and developed the rotary phase converter, enabling electric locomotives to use three-phase motors whilst supplied via a single overhead wire, carrying the simple industrial frequency (50 Hz) single phase AC of the high voltage national networks.

An electrification process started, based on Kálmán Kandó's patent on a single-phase 16 kV 50 Hz AC traction and his newly designed MÁV Class V40 locomotive, which used a rotary phase converter unit to transform the catenary high voltage current into multiphase current with regulated low voltage that fed the single multi-phase AC induction traction motor.

The rest of MÁV's passenger network remained steam based with slow pre-war locomotives and 3rd class "wooden bench" carriages (called fapados in Hungarian, a name nowadays applied to low cost airlines).

The biggest construction of the time was the Déda-Szeretfalva railway, because the new border in Transylvania after the Second Vienna Award cut the rail network into two parts with no connection, while Romania closed all newly created rail border crossings not allowing Hungarian domestic traffic through on the original main route.

During late World War II, MÁV was used to deport Jews in Hungary to Nazi concentration camps.

After World War II the track, buildings and service equipment were repaired with tremendous efforts in relatively short time.

In the 1950s, an accelerated industrialization was ordered by the Hungarian Socialist Workers' Party and the railway was considered a backbone of these efforts.

All the time the production of steam locomotives continued, but at first in small numbers, as the Hungarian industry was fully booked producing Soviet war reparations.

The successor of the Kandó V40 locomotives, the Class V55 proved to be a failure and MÁV decided to purchase no more phase converter engines.

During the 1990s the state-owned MÁV gradually abandoned its most rural routes, but large scale passenger service cuts were blocked by political pressure.

Still, the quality of general passenger service deteriorated considerably since Hungary converted to capitalism, as MÁV became focused on the more profitable cargo business.

Relatively few people have access to the higher-quality "Intercity" express trains because of the unbalanced topography of the Hungarian railway network.

Recent developments include the purchase of twelve Siemens Desiro diesel railbuses for commuter routes and the order for Swiss Stadler Flirts, a type of very advanced electric self-propelled train for medium range shuttle paths, which is mired in a selection scandal against Bombardier's more established, but conservatively engineered Talent trains.

In 2006 the government was elected for promises, among those are making the lines between cities double-tracked, electrified, and validated for 160 km/h (by this transferring highway-cargo of companies to more environment-friendly, faster and greater capacity transportation).

The building works are largely forgotten by public consciousness because of the following: On 7 December 2006, as part of a broader economic restriction package, the Hungarian government announced its intention to stop operation on 14 regional lines with a total length of 474 km (295 mi).

The government, referring to an obligation under the constitution, ensured access to public transit in all settlements by installing bus routes and buses from Volánbusz Mass-Transit Company.

This and increasing frequency theoretically can be done while eliminating the high fuel (diesel or electricity) consumption of the trains and their maintenance cost.

Since the government wanted to avoid costly environmental protection and recultivation regulations, the railway lines will not be formally ceased, with the tracks removed, just the service suspended indefinitely.

On 20 April 2007, the Index news web portal published material from internal MÁV studies, which indicated the new company leadership and the government intend to close all small regional railway lines after 2008, to eliminate sources of reincurring unfinanced expenses at MÁV (the to-be-closed lines' expenses are ten times as large as their incomes).

Ten rural railway lines, previously closed with the reason of low revenues, were reopened with much fanfare.

The branch lines were left in poor condition and still operate with old diesel railcars, speeds rarely exceed 60 km/h not receiving any funds for modernization.

In January 2021, MÁV acquired Volánbusz and VOLÁN Buspark in order to implement the government's intention to have a unified strategic management of the two largest companies in the rail and road passenger transport sector.