It was built in 1931,[2] to the gauge of 20 in (508 mm), and runs for approximately 7⁄8 mile (1.4 km) between Peasholm Park and Scalby Mills in the North Bay area of the town.

Originally, the railway was set further back, but its terminus at Peasholm Park was amended so that it could be seen by pedestrian traffic going to North Bay.

[8] Ahead of her concert at the Scarborough Open Air Theatre, Kylie Minogue performed the song Locomotion on some of the carriages at North Bay Railway.

In 1991 several vehicles were again rebuilt, and in 1998 all ten were rebodied in fibre-glass as "semi-open saloons", having roofs and partial sides, but no doors or windows, leaving the passenger with a mix of protection from inclement weather, and experience of open-air travel.

Eight of these ten still operate today (as of 2010), whilst one has been stripped back to its underframe and is used as a service vehicle and another serves as a display at Scalby Mills.

Using frames originally built in the early 1930s for the Golden Acre Park railway (Leeds) Rail Restorations North East Limited, of Shildon, constructed two fully enclosed saloon coaches, allowing bad weather transport of passengers in comfort.

There are also freight or service vehicles on the line including a bogie flat (converted from one of the original passenger coaches), a four-wheel hopper wagon, a bogie parcels van as a mobile P-Way store and mess and two four-wheel mine car frames serving as a boiler caddy and small flat wagon for P-Way tools.