It is an important railway junction in Sri Lanka Railways' network, connecting the Main Line, which runs from Colombo to Badulla and the Matale Line, which runs from Peradeniya to Matale via Kandy.

Peradeniya railway station is one of the oldest railway stations in Sri Lanka, opening in 1867 when the rail line was extended from Ambepussa to Kandy, as a part of the first train route which connected Colombo to Kandy.

The station initially had two platforms and type of the railway junction was Y-shaped track arrangement, which meant that train routing from one line to the other line required the train to reverse.

Sri Lanka Railways subsequently upgraded the junction railway network to its current Triangular track configuration, as well as constructing an additional platform separate from the main station.

The majority of all long distance and local trains stop at the station.