The Rutland Railroad began as the Champlain & Connecticut River R.R. which was incorporated on November 1 1843, led by Burlington steamship businessman Timothy Follett.

Construction began in 1847 and the name was changed to "Rutland and Burlington Railroad".

December 18, 1848 The Rutland & Burlington Railroad is completed from Bellows Falls, via Rutland to Burlington.

Timothy Follett became the first elected president of the Rutland Railroad in 1849.

The Western Vermont Railroad (later the Bennington & Rutland Railroad) is completed between North Bennington and Rutland.

In May 1860 the Vermont Central Railroad completes the line between its Burlington station and the Burlington Station of the Rutland allowing for direct connections between the two railroads.

In 1867, The Rutland Burlington Railroad is reorganized and renamed the Rutland Railway Company under the leadership of John Page, president of Rutland's Howe Scale Works. The Rutland and Burlington became more commonly known as the Rutland Railroad at this point.

Boats originally connected the line across Lake Champlain to Rouses Point NY until the Vermont & Canada built a connection to Burlington in 1860 through the Champlain Islands. Later the Oakes Ames (1868), would carry freight cars across the lake connecting with the Ogdensburg & Lake Champlain R.R. enabling it to cut into the Vermont Central markets.

In 1870 the Rutland built a 14 mile branh line across Lake Champlain and the plan was to connect with the Plattsburg & Montreal. The attempt to do so was blocked by the Central Vermont and in an administrative move between 1871 and 1896 the Rutland Railroad was leased and operated by the Central Vermont, forming the largest railroad in New England. In addition two steamship lines were being operated. John Gregory Smith is named president and his brother Worthington C. Smith is named vice president.

In 1871 the Rutland Railroad leases the Addison Railroad and builds a floating bridge across Lake Champlain at Shoreham VT. The Rutland now linked to Whitehall and Plattsburgh NY.

In 1886, the Clarendon and Pittsford Railroad, owned by the Vermont Marble Company completes the first two-mile section between Center and West Rutland. By the end of the decade it had connected with the Rutland Railroad to downtown Rutland providing rail access from the quarries to around the country and the world.

In 1896 the Central Vermont went into receivership and the Rutland regained its independence.

In 1901 the Rutland purchased over 50 miles of Chatham and Lebanon Railroad and by this time had ships sailing across the Great Lakes connecting at the Port of Ogdensburg NY

The New York Central Railroad briefly had a controlling interest in the Rutland from 1904, but half the shares were sold in 1911 to the New York, New Haven & Hartford Railroad. The two systems owned 52 per cent of Rutland Stock and would do so until 1941.

In 1917 an agreement with Canadian National Railways allowed through passenger trains to operate from Rouses Point to Montreal over Canadian National lines. Traffic was branched off to Montreal via Nolan Junction. Later on they would run over the CNR's trackage from Rouses Point to Montreal.

In 1938 the Rutland went into receivership and through cost cutting and wage reductions managed to come around.

The decline continued after World War II and many of the branch lines were shut down. At the time 80 per cent of the revenue on freight and passenger traffic came via connections with other railroads. High taxes, interest obligations on its bonds and heavy competition for its through freight business coupled to keep the line struggling.

Strikes then hit the Rutland in 1953 which led to abandonment of passenger services. In 1961 the railroad applied to the Interstate Commerce Commission for complete abandonment. This was approved on May 20, 1963.

Most of the rights of way were purchased by the State of Vermont and is operated today by the Vermont Railway.