[3][4] Built for the Dana Lumber Company between 1910 and 1911,[5] Nada Tunnel (pronounced nay-duh by locals)[6] was named after Nada, Kentucky, then a logging town about 10 miles (16 km) past the tunnel's entrance.

[7] Solid sandstone was blasted with dynamite and dug out with steam machinery and hand tools, with two teams working from each side of the ridge.

[10] Narrow gauge steam locomotives of the Big Woods, Red River & Lombard Railroad regularly hauled timber extracted from the vast forests of the Red River Valley through the tunnel, to a sawmill 15 miles (24 km) away in Clay City.

The railroad tracks were removed and a dirt road was laid in the unlit tunnel in order to accommodate horse and pedestrian traffic.

[13] Nada Tunnel has since been paved to carry a single lane of road traffic.