The Bridgnorth Castle Hill Railway Company Ltd was registered in 1891, and construction started on 2 November 1891. The railway was opened on 7 July 1892 by Mayor William Burton.Originally the railway was powered by a simple system using water and gravity. Water was pumped into a 2,000-imperial-gallon (9,100 l; 2,400 US gal) tank beneath the top car until its weight, a maximum of 11.5 long tons (11.7 tonnes), overcame that of the lower car. When the car reached the bottom station the tank was emptied and pumped up to a 30,000-imperial-gallon (140,000 l; 36,000 US gal) tank on the top of the upper station.
Between 1943 and 1944 the system was rebuilt to use electricity, with an official re-opening on 9 May 1944 by Mayor T.C. Pembro – who had taken office only 2 hours previously. In 1955 the original heavy wooden cars were replaced by the 'up-to-date' stronger and lighter (5.4 long tons or 5.5 tonnes) aluminium monocoque ones still in use today. Each car can carry up to 18 passengers.The rails were replaced in about 1972 with the bullhead design formerly used on mainline railways.