Waterloo serves as a major bus-rail interchange, connecting buses to and from central Lower Hutt, Naenae and Wainuiomata with trains to and from Wellington.

Significant urban development of the Hutt Valley in the 1940s led to the decision in February 1946 to commence electrification in 1949 and to operate electric trains between Waterloo and Wellington from August 1953.

In 1986, as a result of the Hutt Valley Transport Study, Waterloo was designated an interchange for bus and rail services in preference to Woburn, which had previously had this role.

It was felt that Waterloo was a more logical choice as it was closer to centres of residential and commercial interest, had sufficient room for bus platforms to be installed, and was not burdened with other operational requirements such as Woburn being the junction with the Gracefield Branch, with its loops and sidings.

[2] On 29 June 2021, the Greater Wellington Regional Council announced plans for a new transport interchange to replace the existing station at a projected cost of $20.25 million.