Despite its decline as a method of passenger transportation, the railroad remains the most efficient method of land transportation because it requires the least amount of fuel and human labor and is the least damaging to the environment. Found in almost every country in the world, railroads have transported millions of passengers and millions of tons of freight in their colorful history.

Early railroads were small, single-use tracks used in British coal mines. In 1803, however, a British mining engineer, Richard Trevithick, built a steam locomotive that actually ran on the rails. In 1825, the world's first steam-powered public railroad, the Stockton and Darlington in England, was opened for use. Like the British miners, American colonists also built short railways for transporting stone and coal. The first public railroad built in the United States was the Baltimore and Ohio, chartered in 1827. In 1830, service began on this railroad, with horses providing the power. The first American railroads started from the Atlantic ports of Boston, New York, Philadelphia, Baltimore, Charleston, Savannah, and Wilmington. Within 20 years, four rail lines had crossed the Alleghenies to reach the Great Lakes and the tributaries of the Mississippi River. Meanwhile, other lines had started in cities farther west, and in the mid-1850s, such cities as Chicago, St. Louis, and Memphis were connected by rail to the East Coast.

After the Civil War, the pace of railroad building increased. Two railroads—the Union Pacific, building westward from Omaha, Nebraska, and the Central Pacific, building eastward from Sacramento, California—had been chartered during the war to help promote national unity. In 1869, the two railroads were joined in Promontory Point, Utah, completing the first rail connection across the United States. A golden spike was driven to commemorate the historic union.

By 1870, when the U.S. railroad movement was 40 years old, there were 53,000 miles of line. Between 1870 and 1880, another 40,000 miles were added, and the following decade saw an even more rapid expansion of lines: 70,000 miles were added. In the next two decades, the lines grew by 57,000 miles, and by 1910 the network was largely complete.

At the same time railroads were extending the length of their track, they were also busy improving the quality of their locomotives and trains. In 1895, electric locomotives, which drew their power from central generating stations through overhead wires or charged third rails, were introduced. These were particularly useful in areas where steam locomotion was impractical, such as the zones of electrified service around New York, Philadelphia, and Chicago. In the United States, central-station electric locomotives are still used in these areas of high-density traffic. Another type of electric locomotive—the diesel—became much more widely used. The diesel is an electric locomotive that carries its own power plant and therefore needs no overhead wires or charged third rail. Diesel locomotives required less maintenance, offered more flexibility, and ran more efficiently. They were first introduced into heavy road freight service in 1941, and by 1960 their advantages had caused railroads to drop steam power completely.

Changes in locomotives eventually resulted in other changes in rail travel, such as changes in the way trains slowed down and stopped. In early days, trains seldom traveled at more than 20 miles per hour. Although they were frequently full of travelers, passengers rarely were injured or killed in train accidents. As railroads became more commonly used and locomotives got faster, however, the number of train accidents increased, and the accidents themselves became more serious. Fortunately, in 1869, George Westinghouse patented the extremely effective air brake, which had perhaps the greatest impact on railroad safety ever. The air brake compressed and released air, acting on all the wheels of an entire train simultaneously.

By the 20th century, a web of transportation had been created that allowed passengers and freight to travel to every major American city, and many minor ones, safely and efficiently. In addition, the romance and glamour of the railroad had captured the attention and the heart of the progress-oriented United States. However, the romantic, golden days of the railroad were soon to pass. New methods of transportation began to make an impact on the railroad business around 1920. With the increase in the number of cars and the rapid expansion of paved roads, much traffic was taken from the railways. Trucks began to transport loads of freight over short distances, while cars and buses lured passengers away from rail travel. In fact, railroad passenger traffic dropped noticeably between 1920 and 1930, never to rebound.

As a result of the decline in railway traffic, the railroad network began to shrink. Lines that could no longer afford to operate were sometimes abandoned. Many of the nation's short lines were absorbed into the larger systems. In 1961, there were only 661 operating railroads of the 1,300 systems in operation 50 years earlier.

By 1970, more than 100 of the nation's 500 passenger railroads were on the verge of bankruptcy. Congress responded in October of that year by establishing Amtrak, officially known as the National Railroad Passenger Corporation. Amtrak was a semipublic corporation that took over the operation of most of the nation's intercity and cross-country passenger service. Legislation allowed individual railroads to discontinue passenger service, turning over their passenger equipment to Amtrak. The tracks used by Amtrak, however, remained owned by various private railroad companies. Amtrak remains partially government funded.

In an effort to assist the failing railroads, the government also established Conrail, or the Consolidated Rail Corporation, in 1975. Conrail was formed to take over a large number of privately owned railroads that had suffered financial collapse. Unlike Amtrak, however, Conrail was organized to run without continuing government subsidies and was returned to the private sector in 1987.

In spite of the government's efforts, railroads continued to shrink. Today, American railroads are primarily high-volume freight carriers, transporting cargo such as coal, motor vehicles, grain, and farm products over long distances. Following passage of the Staggers Rail Act in 1980, the freight rail industry recovered profitability and today is a nearly $80 billion industry, transporting about 28 percent of freight in the U.S. Nearly 140,000 miles of track are in use by Amtrak, 33 commuter lines, and 614 freight lines across the U.S. Trains are also used in the nation's largest cities as subway systems or elevated trains, for intercity travel. The crews of today's trains have also changed. In years past, a five-person crew was common, with an engineer, assistant engineers, brake operator, and conductor aboard. Today, an engineer and conductor are often the only two crew members aboard a train, as more equipment and instruments are computerized and automated. The job of brake operator is virtually obsolete in today's railroad industry.

The railroad industry is improving these days, with rail transport seen as energy efficient and convenient compared to transportation by car and truck, and as an alternative to flying. In 2013, Amtrak reached a milestone with more than 31.6 million passengers and in the years following has continued to service over 30 million passengers. Investment in maintaining and improving railroads and bridges have helped the industry, and experts predict track systems will need expansion, especially around major cities and hubs where congestion occurs.