The Baltimore & Ohio, America's first commercial railroad, extended its line into what is now West Virginia in the 1840s, entering the northern reaches of the state at Harpers Ferry, crossing to Cumberland, Maryland, and then back to Grafton and traveling on to the Ohio River at Wheeling by 1853. This line was important in the Civil War.

In the south, the Virginia Central (later Chesapeake & Ohio) had reached what is now Clifton Forge, Virginia, by 1856. To connect this line to the west, Virginia incorporated the Covington & Ohio, which did considerable work in what is now southern West Virginia before the war. After the war the Virginia Central and the Covington & Ohio were merged to form the Chesapeake & Ohio. In the period 1869—73, this line was built through the wild New River Gorge, reaching the Ohio in January 1873. Although the C&O was built as part of the great transcontinental scheme of its builder, Collis P. Huntington, local coal soon became a dominant commodity as mines opened along the new railway. Competing railroads soon invaded the southern coalfields, primarily the Norfolk & Western in the 1880s.

Meanwhile, to the north, the B&O continued to expand its lines in the northern West Virginia coalfields, sending its coal to the sea at Baltimore and westward to the Great Lakes.

By 1900, what became the Western Maryland Railroad had entered the coal trade and was building new lines in the Eastern Panhandle and adjacent areas. It ultimately became an important hauler of coal to the port of Baltimore. Short lines grew up, including the Coal & Coke Railway, which had been built to tap the coal and timberlands of central West Virginia and became part of the B&O in 1917. Likewise, the Kanawha & Michigan, which entered the state at Point Pleasant and terminated at Charleston, later became part of the huge New York Central System. The old K&M line later was operated by Conrail, then absorbed into Norfolk Southern, and in 2016 became the Kanawha River Railroad.

The last entry into West Virginia's coalfields was the Virginian Railway. Completed in 1909, it originated at Deep Water in Fayette County. The Virginian competed with both N&W and C&O for the eastern coal markets, but didn't have lines to the west and never competed for the even larger Midwest trade. Lacking a large merchandise or passenger trade, it became mostly a one-commodity line, virtually a coal conveyor from southern West Virginia to the sea at Hampton Roads, Virginia.

By contrast, the B&O's lines in West Virginia were part of its main line to Cincinnati and St. Louis, and carried a huge merchandise and passenger trade in addition to West Virginia coal. Likewise, the C&O developed an important passenger service between Washington and Cincinnati at an early date. The N&W had little through trade beyond coal, and its Cincinnati-Norfolk passenger service suffered from a lack of connections to the major cities of the Northeast.

West Virginia's huge lumbering industry was served by company-owned lumber railroads to bring the logs to the mills, using gear-driven Shay, Climax, and Heisler locomotives to master the steep grades. The sawed lumber was then shipped by the main line railways to the principal markets of the nation. Other short lines included the very early Winifrede Railroad, which carried its coal to barges on the Kanawha River before the region had rail connections to the outside world, and the Campbell's Creek Railroad, connecting with the New York Central east of Charleston.

West Virginia's railroads helped to develop the state's coal industry and fostered the establishment of great industrial centers, especially in the Kanawha Valley and Northern Panhandle. They also connected West Virginians with the world. News and correspondence could move at the speed of light by the telegraph lines that followed the railroads; mail and express arrived from every corner of the continent; and travel to far places was quick, easy, and comfortable. Most importantly, the state's raw materials could be transported cheaply and efficiently from sometimes remote locations, and finished goods could be distributed to people throughout the state. The coming of the railroads is the seminal economic event of the 19th century for West Virginia and the nation.

The steam locomotive was the power that allowed railroads to be created, just as steam powered the factories and mills served by those railroads. In the early 20th century, a movement to electrify railroads gained some momentum, and in the 1920s the Virginian and the Norfolk & Western electrified considerable territory within western Virginia and West Virginia. However, this technological change was eclipsed in the late 1930s by the introduction of very powerful diesel-electric locomotives. As coal haulers, the West Virginia railroads resisted the move from coal to diesel fuel. By the early 1950s, the C&O and B&O finally dieselized. The N&W held out as an all-steam railroad until 1956, and operated its last steam equipment in West Virginia in 1960. The diesels required less maintenance and fewer service stops. Shops were consolidated and closed and employment in these areas dropped. Railroad towns such as Grafton and Hinton suffered a loss of jobs.

In the 1960s, suffering from the competition of airlines, highways, and trucks, and from archaic government regulation, railroads began to merge. In 1960, the Chesapeake & Ohio and the Baltimore & Ohio began a gradual consolidation that eventually included the Western Maryland and culminated in the creation of the Chessie System in 1972. Chessie merged with the Seaboard System (itself an amalgam of five major southeastern lines) to form CSX Transportation, which today controls the lines remaining from the former C&O, B&O, and Western Maryland within West Virginia. The Norfolk & Western, at about the same time, merged with the Southern Railway to form Norfolk Southern, which today controls the lines of the former N&W and Virginian within West Virginia. (The Virginian had merged into N&W in 1959.) Apart from several short lines, Norfolk Southern and CSX Transportation today control railroading within the state. Both systems still rely on coal transportation as their main commodity from West Virginia.

West Virginia Congressman Harley Staggers pushed through laws that essentially deregulated railroads in the early 1980s. Today the remaining major systems haul more freight than ever before with a tiny fraction of the motive power and employees, and about one-third of the trackage that existed at the height of the railway age about 1920. Railroads remain important in West Virginia today, even though the number of lines has shrunk.