The line began in Oxford, connecting with the Philadelphia and Baltimore Central Railroad, and proceeded roughly westward to Fairmont, then southwest to Peach Bottom, on the eastern shore of the Susquehanna River.

In 1890 the company went bankrupt again and it was sold to investors who reorganized as the 3 ft (914 mm) narrow gauge Lancaster, Oxford and Southern Railroad.

New owners took control in 1912 of the reorganized Lancaster, Oxford and Southern Railway, but they were no more successful in reviving the company, and by 1914 the LO&S discontinued all trains, except for a small mail operation using a speeder.

In October 1914 the railroad was sold again, and an attempt was made to operate more economically by converting some passenger cars to gasoline-powered railcars (sometimes called "doodlebugs").

Competition for freight traffic from trucks, as well as the high prices being offered for scrap metal during World War I, led the management to permanently close the railroad in 1918.