The original 10-mile (16 km) link from San Luis Obispo to Avila Beach and Port Harford was later built southward to Santa Maria and Los Olivos, with branches to Sisquoc and Guadalupe.

San Luis Obispo rail yard warehouses became a commercial center for inbound merchandise and outgoing shipments of hay, grain, dairy products, sheep and cattle.

The reorganized railroad built a 4 miles (6.4 km) branch line in 1899 from Santa Maria to a new Union Sugar Company beet refinery in Betteravia.

By 1902 the railroad had converted its engines to burn oil and was strapping tanks from standard gauge cars onto their flatcars at the rate of ten per month.

Santa Maria Valley agriculture slowly shifted from sugar beets to produce which could be loaded directly onto Southern Pacific refrigerator cars.

The gravel business required purchase of two 2-8-0s from the recently standard-gauged Nevada–California–Oregon Railway to replace Pacific Coast 2-8-0s dismantled for parts to keep the other engines running.

In 1938 locomotive number 106 was destroyed in a grade crossing collision with a gasoline truck, and the last three coaches and a baggage car were sold to the White Pass and Yukon Route.

The United States Navy bought the boxcars for use at Naval Station Pearl Harbor when operations ended in 1941; and locomotive number 111 went to the Oahu Railway and Land Company.