The THI&E was formed in 1907 by the Schoepf-McGowan Syndicate as a combination of several predecessor interurban and street car companies and was operated independently until incorporation into the Indiana Railroad in 1931.
The THI&E served a wide range of territory, including farmlands in central Indiana, the mining region around Brazil, and numerous urban centers.
Eventually, it slowly succumbed like all the other central Indiana interurban lines, to competition from automobiles, trucks, and improved paralleling highways.
The THI&E system totaled over 400 miles (640 km) of track at this point and was the largest Indiana interurban.
THI&E's limited stop express to Terre Haute from Indianapolis was named the "Highlander."
In the 1920s, the two ran express passenger service between the two large cities, and the freight interchanged from Ohio interurbans by way of the Dayton and Western became financially very important.
The unprofitable branch lines that made up much of the THI&E did not fit into Insull's master plan, and they were abandoned.
The busy west-east Terre Haute through Indianapolis to Richmond line survived, but the Danville, Martinsville, Lafayette and Crawfordsville branches were abandoned on October 31, 1930.