It runs from the Oste near Spreckens four kilometres above Bremervörde through the former Teufelsmoor ("Devil's Moor") and Gnarrenburg, until it reaches the Hamme near Viehspecken.

The canal was built between 1769 and 1790 by Jürgen Christian Findorff and was used to drain the Teufelsmoor and to transport freight (mainly peat to Bremen and Hamburg) in small barges (Bullen).

Its long construction time was due to the difficulties caused by the soft peat soil which repeatedly collapsed and meant that the channel had to be re-excavated.

From the 1860s numerous flap gates (Klappstaue) and double sluice gates were installed, that made it easier for the peat barges, such as those built in the yard in Schlussdorf.

The canal initially formed the only inland water link between the Elbe and Weser.