The company began operations in 1871 between Deep River and Essex, and has since reopened additional parts of the former Connecticut Valley Railroad line.

The vision of a Valley Railroad started in the 1840s when President of the Charter Oak Life Insurance Company, James Clark Walkley traced the 44-mile route by stagecoach with friend Horace Johnson.

The line was completed during the summer of 1871 with the first ceremonial train run over the 45 miles (72 km) on July 29, 1871, at a steady speed of 22 mph.

[1] Financial trouble plagued many early railroads, and the Connecticut Valley defaulted in 1876 on its second mortgage bonds and was placed in receivership.

[3] The Valley Line was abandoned in March 1968, by the New York, New Haven and Hartford Railroad several months before merging into Penn Central.

[4] The Valley Railroad Company leases, from the Connecticut Department of Energy and Environmental Protection, the track running from Old Saybrook up through Essex, Deep River, Chester, Haddam, and Middletown, totaling 21.67 miles (34.87 km).

The trackbed is gravel ballast, with track made of conventional wood crossties, with steel rails fastened to the ties.

The rail corridor between Haddam and Middletown, which has been cleared of brush and receives property maintenance and surveillance from hi-rail vehicles, is undergoing full restoration as time and funding permit.

Donated by the Zanardi family in 1993, it was retrieved by volunteers of the Friends of the Valley Railroad and moved by flatcar to its present location.

On July 18, 2009, the Friends of the Valley Railroad built a passenger shelter in Chester on the site of the original Hadlyme station.

1647 ran at low speed into the rear of the idling North Cove Express dinner train on the passing trackage.