The Rutland Railroad Company was originally incorporated in 1867 as a result of the reorganization of the Rutland and Burlington Railroad. In 1871, the line was leased to the Vermont Central Railroad for a period of 20 years. In 1891, it was subsequently leased to the Central Vermont Railroad for a period off 99 years. In 1896, the Central Vermont Railroad entered receivership, and the Rutland regained its independence.
In 1898, the Rutland began construction of the Champlain Island Extension, north from Burlington and across Lake Champlain. Completed about a year later, this spur’s purpose was to circumvent the Vermont Central.
In 1901, the Rutland leased the Ogdensburg and Lake Champlain Railroad.
In 1904, the New York Central took control of the Rutland, and within 7 years had sold 50% of the line to the New Haven Railroad. The line began a scaling back period before entering receivership for the first time in 1938. The Rutland managed to continue operating for another 12 years before being renamed the Rutland Railway in 1950. In 1953, a three-week strike shuts down the line – it was the first strike in the company’s history. The strike however proved a fatal blow to passenger service, which never returned. Freight lines continued to operate until about 1961, when the final application for abandonment was filed with the ICC.