The Maine State Legislature granted a charter to the Old Town Railway Company owned by Edward and Samule Smith and Rufus Dwinel in 1832. The Chief Engineer, Joseph W. Taney, and his crew surveyed the route and began construction. The company ran short of funds and the building ceased soon after, however.
In 1833, a new group of investors chartered the Bangor and Piscataquis Canal and Rail Road Company with the state. In 1835, construction began again and on November 20, 1836, the first train ran from Bangor to Old Town; the line opened to the public on the 29th of November that year.
The company ran for thirteen years until it was sold to General Samuel Veazie in 1849 who built a bridge across the Penobscot River and extended the tracks to Milford. At this time General Veazie renamed it the Bangor, Old Town and Milford Railroad. The European and North American Railroad bought the line in 1869, and it was ultimately acquired by the Maine Central Railroad in 1882.
The line was 12 miles in length, from the station in the block between Cumberland and Curve Streets to the terminus in Milford. The average speed of the trains was around 6 miles per hour. The Gauge was 4'8" with the earliest rails being strap iron spiked to 6" planks; each plank was 14 feet long. This particular construction was unstable and at times the rail would come loose from the plank and potentially up through the floor of the coaches. In 1849, the tracks were replaced with "chair rail" and later, in 1867, with the now familiar "T" rail.