By November of 1879 the end to railroad service in the New York state town of Ellenville came with the New York and Oswego Midland Railroad going broke and the Town of Wawarsing canceling its bonds.
However, a syndicate formed, the New York, Ontario and Western Railroad (or simply the O&W), in 1880 and purchased the Midland property. This railroad also had its problems (for many years it was called the Old and Weary), leading to the threat of a competing rail line - the Delaware Valley and Kingston Railroad Company, running from Lackawaxen to Kingston.
The O&W overcame the threat in 1899 by purchasing the rights of the Kingston and Rondout Valley Railroad Company and entering into an agreement with the Erie Railroad. Despite the opposition of locals who wanted a competing line, it gained the backing of the railroad commissioners and in 1901, the Ellenville and Kingston Railroad Company was formed. Later that year the railroad bought much of the Delaware & Hudson Canal Company's property and began extending the line to Kingston.
The line opened on December 22 1902, as a single track, standard gauge railroad. It ran between the two named cities, entirely within Ulster County, a total of 27.8 miles.