[1][2] Transport Heritage NSW has divisions located in Thirlmere, New South Wales, where the NSW Rail Museum is dedicated to displaying locomotives, passenger cars, and freight rolling stock formerly operated by the New South Wales Government Railways (NSWGR) and various private operators.

A survey of potential sites around Sydney found Enfield Locomotive Depot to be the most suitable and in 1963 a successful submission was made to the Department of Railways.

The PTC under Commissioner Philip Shirley decided it wanted all steam locomotives, including those owned by preservation organisations, off the network with 3820 operating the NSWRTM's last tour to Taree in 1974.

[4] The PTC also wanted to demolish the Enfield roundhouses to make way for a container terminal and offered the museum a site at Thirlmere on the then lightly used Picton – Mittagong loop line.

[4] Site clearing began in late 1974 and works were sufficiently advanced for the transfer of stock to begin in June 1975.

By the early 1980s it was operating enthusiast journeys on a regular basis including a monthly service from Sydney Central to Thirlmere.

The famous British railway locomotive 4472 Flying Scotsman visited Thirlmere in March 1989 as part of its tour around Australia.

[8] In 1993, the museum concluded a lease for the 14-kilometre (8.7 mi) Picton – Buxton railway line following its closure by the State Rail Authority.

[11] A major redevelopment saw the locomotive depot relocated to a roundhouse built at the southern end of the site opening in November 2009.