It runs under the Southern Alps from Arthur's Pass to Otira – a length of over 8.5 kilometres (5.3 mi).

Construction commenced in 1907 and a "breakthrough" celebration was held on 21 August 1918 by the Minister of Public Works Sir William Fraser.

[1] The Midland Railway Company investigated alternatives to a long tunnel, but a line over the pass with gradients of 1 in 50 on both sides was not practical.

[2] A contract to build the tunnel in five years was let to the engineering firm of John McLean and Sons who started at the Otira end in 1908, using the "drill and blast" method.

Tenders for electrification of the 14 km Otira-Arthur’s Pass section through the tunnel were received in 1920 from the National Electric Company of New York, and English Electric of London; English Electric obtained the order for five locomotives plus a battery-powered shunting locomotive No E1 (which was scrapped in 1930 because of the cost of storage batteries), plus power plant and overhead catenary (14 km main line plus 8 km of yard sidings).

[7] Because of the increasing age of the electric plant and the availability of upgraded DX class diesel locomotives, the electrification was decommissioned in 1997 and the equipment removed.

[7] To overcome the fume problem, a combination of a door and fans are used, similar to that used in the Cascade Tunnel in the United States of America, which was also once electrified.