Since the opening of the Suez Canal in 1869, the Cisleithanian government of Austria-Hungary had urged for a direct connection of the restored main Austrian seaport at Trieste with the Bohemian coalfields and iron works in the northern parts of the Monarchy.

Significant construction cost overruns triggered fierce debates in the Austrian Imperial Council, nevertheless on 20 September 1905 the first section of the line up to Bad Gastein station was ceremonially opened by Emperor Franz Joseph I, Minister-President Paul Gautsch von Frankenthurn, and Archbishop Cardinal Johannes Katschthaler.

From 1969 onwards further sections were restored to double track including several new passages, viaducts and straightenings to cope with the high traffic load and to allow higher travelling speeds.

Up to World War II, the Tauern Railway mainly served Austrian domestic rail service, with a few links to Yugoslavia (Zagreb, Belgrade, and the Adriatic coast).

Today the Tauern Railway provides EuroCity service to Zagreb and ÖBB InterCity connections link Salzburg with Klagenfurt, partially served by Railjet trains.