Upon the end of the lease in 1869, the company expanded further into Massachusetts, reaching as far north as Shelburne and Turners Falls.

[5] Opponents argued that the New Haven and Northampton's charter authorized it to build a railroad "on or near" the right of way of the previous canal.

[5] The matter went to the Connecticut Superior Court, where a judge ruled that the railroad could not build towards Springfield, as doing so would violate its charter.

[3] These negotiations concluded with the New York and New Haven agreeing that the Canal Line would not build north of Granby, and only limited connecting service was to be made available with the HP&F in Plainville, since traffic could potentially travel between New Haven and Hartford via a transfer in that city.

[4] This arrangement upset the communities along the Canal Line, such as Southington, which were left with poor service to and from Connecticut's capital city.

[3] From the start, the New York and New Haven had been suffering a significant loss from its lease of the Canal Line, losing between $35,000 and $45,000 per year.

The company quickly began to expand its lines at this time, nearly immediately starting construction on an extension of the Collinsville Branch to Pine Meadow, the site of a tool manufacturer.

[7] In Massachusetts, the New Haven and Northampton built a branch from North Westfield to Holyoke in 1871, a distance of nine miles (14 km).

[11] The New Haven and Northampton began a switch from iron to steel rails in 1872, which were stronger and better able to handle increasingly heavy trains.

[11] A battle for control of the New Haven and Northampton began in 1880, when the Boston and Albany Railroad, an east–west line in Massachusetts, chose a new president.

Bliss sought to take control of the New Haven and Northampton to secure a competing route for traffic between New York City and Boston.

[13] The president of the New Haven Railroad was said to have learned of rumors about the Boston and Albany's plans from a mention in a Springfield newspaper in March 1881.

"[13] The executives decided to buy the shares still held by Joseph Sheffield, who controlled more than half the company's stock.

[13] Now having control of a majority of the Canal Line's stock, the New Haven installed new directors which supported its interests.

[11] While the Canal Line was only mildly profitable for its new owners, the New Haven judged the costs of allowing a competitor such as the Boston and Albany or the New York and New England Railroad to take control to be far higher.

[15] Entering the 20th century, the New Haven and Northampton was considered a secondary route compared to the parallel New Haven–Springfield Line.

[11] The remainder of the Shelburne Extension was formally abandoned in 1943 along with the Turners Falls Branch, though neither line had been used for trains since the early 1930s.

That year, the main line was cut back from Northampton to Easthampton, and the rest of the Williamsburg Branch was abandoned.

To save the 5 miles (8.0 km) between Avon and Simsbury, the state of Connecticut agreed to provide a subsidy for Conrail operations over that segment.

[21] The Connecticut Department of Transportation has identified the abandoned portions of the Canal Line between Hamden and Suffield, as well as between Farmington and Canton, as corridors which have the potential for future freight rail service.