The Twenty-third Street Railway was leased by numerous larger companies in the late 19th and early 20th century.

The trolley line was replaced with bus service in 1936 and was originally numbered the M18-15 and the M26 before gaining the current M23 designation in 1989.

Along Avenue C and 20th Street in Peter Cooper Village, in both directions, the M23 shares bus stops with the M9 route.

[2][4] A total of 14 local or Select Bus Service routes intersect the M23, as well as the PATH and five subway stations.

In addition, 28 express bus routes run along 23rd Street, and thus, a non-free transfer either to or from the M23.

Most of this trackage was built by the Twenty-third Street Railway, with three exceptions: a double-track segment between Broadway and Fourth Avenue, built as per an 1860 grant by the Forty-second Street and Grand Street Ferry Railroad; another double-track portion between First Avenue and the former Asser Levy Place, built under another 1860 grant by the Central Park, North and East River Railroad Company; and a single-track portion between Second and First Avenues, built as per a grant awarded to the Second Avenue Railroad in 1852 and confirmed in 1854.

[7]: 287 The railway leased the Bleecker Street and Fulton Ferry Railroad, which ran from 14th Street on the Hudson River to Fulton Ferry on the East River, on January 10, 1876, for a duration of 99 years.

[13][14][15]: 1  A New York City Omnibus Corporation bus route (M18-15)[16][17] replaced the 23rd Street Crosstown Line trolley.

[18]: 238  The bus was taken over by the Manhattan and Bronx Surface Transit Operating Authority (MaBSTOA) in 1962.

[22] In 2010, the M23 was one of seven local bus routes in Manhattan to participate in a PayPass smart card program.

[5]: 6–9 In 2009, the Metropolitan Transportation Authority and the New York City Department of Transportation (NYCDOT) identified the M14A/D, on parallel 14th Street, as a potential corridor for Phase II of SBS, the city's bus rapid transit system, as well as finalized plans to implement SBS on the M16/M34 along the also-parallel 34th Street.

[31] After lengthy consultation, the M23 was converted to SBS on November 6, 2016,[32][33] with all-door boarding, off-board fare payment, dedicated New York City bus lanes, and BusTime-equipped countdown clocks at some stops.

[34] This is keeping in line with other SBS routes with the same upgrades, which have seen their average speeds increase between 10% and 25% after implementation.