[2] The extension of the line from Yarra Glen to Healesville on 1 March 1889 required a 1 in 40 climb into a 154.4 metre tunnel with a corresponding descent at nearly the same grade.

On 7 February 2009, most of the trestle bridges which were a major part of the viaduct crossing the Yarra river and its floodplains were destroyed in the Black Saturday bushfires.

Only "Y" class diesels could haul the freight services due to the deterioration of the track condition, which resulted in the derailment of T401 on 5 August 1980.

The Yarra Valley Railway currently run a Walker railmotor from Healesville to the Tarrawarra Winery, crossing the Watts River, under the Donovan's Road overbridge and through the tunnel.

There are plans in place to improve the line from Healesville to Tarrawarra to a standard suitable for the running of Rail Motors, with further goals being reconstruction to Yarra Glen.

Works are underway to restore the track from Yarra Glen to Healesville following the loss of 13 bridges on Black Saturday 2009.

It ran its first paying passenger run since restored on 7 March with the seats being auctioned in singles, doubles and triples to the exhibitors of the model railway show.

Future connections were also proposed to link up Healesville to the Warburton rail trails and form a loop.