Together with the Ausserfern Railway (Ausserfernbahn) it connects the Austrian district of Außerfern (located west of the Fern Pass) with the Tyrol through Germany.

The engineer and contractor Josef Riehl had already presented a proposal in the late 1880s to the Austrian ministry of trade and economics (k.k.

Ministerium für Handel und Volkswirthschaft) for a route first running east from Innsbruck to Hall and then after a bend back to the west largely in tunnels up to Seefeld.

In addition to the line construction, this included land acquisition, rolling stock, electrical equipment and the power plant.

The contract set the fixed price of 24.4017 million krone to be paid to the contractors Riehl and von Doderer, who thus carried all risk of possible cost overruns.

Despite the difficulties, the section of the Mittenwald railway on the territory of Austria-Hungary was built in the remarkably short time of about two years.

In 1945, the Mittenwald Railway was judged by the Allies to be strategically important, and a total of six air raids were flown against the Gurglbach Viaduct.

With the holding of the 1976 Winter Olympic Games in Innsbruck and Seefeld, the Mittenwald line was expected to have high loadings and all stations were equipped with colour light signals.

The superstructure was adapted so that locomotives of both Deutsche Bundesbahn and the Austrian Federal Railways (Österreichische Bundesbahnen, ÖBB) could operate on the line.

Rail operations ran smoothly during the 1976 Olympic Winter Games, just as they did during the 1985 Nordic World Ski Championships in Seefeld.

The line crosses the Schlossbach at an altitude of about 60 m above the water level over an iron arch truss bridge with a length of 66 m. The Finstertal Viaduct was built on the karst slope of the Hechenberg (mountain).

The construction of the tunnels in the Martinswand was particularly difficult and a 17 km long high voltage line had to be built from Innsbruck just for the operation of the machinery.

The ingress of water stopped the construction work on the western side of the tunnels and an electric pumping plant had to be installed.

At Innsbruck West station the line branches off from the Arlberg Railway and reaches in Hötting its lowest point of 580 m above sea level.