The original company, the Union Pacific Rail Road was incorporated on July 1, 1862, under an act of Congress entitled Pacific Railroad Act of 1862. The act was approved by President Abraham Lincoln, and it provided for the construction of railroads from the Missouri River to the Pacific as a war measure for the preservation of the Union. It was constructed westward from Council Bluffs, Iowa to meet the Central Pacific Railroad line, which was constructed eastward from Sacramento, California. The combined Union Pacific–Central Pacific line became known as the First Transcontinental Railroad and later the Overland Route.

The original UP was entangled in the Crédit Mobilier scandal, exposed in 1872. As detailed by The Sun, Union Pacific's largest construction company, Crédit Mobilier, had overcharged Union Pacific; these costs had then been passed on to the United States government. In order to convince the federal government to accept the increased costs, Crédit Mobilier had bribed congressmen. Several prominent UP board members (including Durant) had been involved in the scheme. The ensuing financial crisis of 1873 led to a credit crunch, but not bankruptcy.

Extending towards the Pacific Northwest, Union Pacific built or purchased local lines that gave it access to Portland, Oregon. Towards Colorado, it built the Union Pacific, Denver and Gulf Railway: both narrow gauge trackage into the heart of the Rockies and a standard gauge line that ran south from Denver, across New Mexico, and into Texas. The Union Pacific Railway would later declare bankruptcy during the Panic of 1893. Again, a new Union Pacific "Railroad" was formed and Union Pacific "Railway" merged into the new corporation.

In the early 20th century, Union Pacific's focus shifted from expansion to internal improvement. Recognizing that farmers in the Central and Salinas Valleys of California grew produce far in excess of local markets, Union Pacific worked with its rival Southern Pacific to develop a rail-based transport system that was not vulnerable to spoilage. These efforts came culminated in the 1906 founding of Pacific Fruit Express, soon to be the world's largest lessee of refrigerated railcars.

As the 20th century waned, Union Pacific recognized - like most railroads - that remaining a regional road could only lead to bankruptcy. At the close of December 31, 1925, UP and its subsidiaries had operated 9,834 miles of routes and 15,265 miles of track; in 1980, these numbers had remained roughly constant (9,266 route-miles and 15,647 track-miles). But in 1982, UP acquired the Missouri Pacific and Western Pacific railroads, and 1988, the Missouri–Kansas–Texas. By 1993, Union Pacific had doubled its system to 17,385 route-miles.

The first major step in the Union Pacific/Southern Pacific merger is taken with the completion of the first of four cutovers to the computerized Transportation Control System; the former Denver & Rio Grande Western portion of the SP. The former SP headquarters building in San Francisco is offered for sale on June 15.