The line opened in 1941 to serve various World War II armaments factories at what was then known as Penfield.
[2] During the war years, the line was used by passenger trains carrying workers to the munitions factories in the area, which manufactured components for the Small Arms Ammunition Factories, as well as freight trains carrying raw materials in and armaments out.
A more limited peak-hour passenger service to Penfield continued after the war, serving staff at the government Weapons Research Establishment, later to become the Defence Science and Technology Organisation (DSTO).
The balloon loop was closed on 8 June 1983, following the derailment of a train composed of Redhens railcars #319, #870, #318, #330, #869 & #331 while traversing it.
The short spur remained, but the next section through Hilra station was replaced by a road through an industrial estate.