As the El Paso and Northeastern Railroad sought passage northward through Alamogordo in the 1890s, a steady of supply of timber was necessary to continue construction on its railroad line. The owners, upon seeing the Sacramento Mountains with its lush forests to their east (the Lincoln National Forest today), decided to build a branch line into the trees/mountains to tap the natural resources there.

The EP&NE survey team found at the summit not only excellent trees for timber, but a potential attraction for tourists with the area's majestic views and abundant natural wildlife. Thus, the town of Cloudcroft ("clearing in the clouds") was born, and the EP&NE quickly built a 26-mile branch line towards the summit. The railroad was called the Alamagordo-Sacramento Mountain Railway, a subsidiary of the EP≠ its nickname, "The Cloud-Climbing Railroad", became well-known as the railroad offered spectacular vistas along the way, not to mention its destination "in the clouds". In addition, at the time of its completion, it was the highest standard-gauge track in the world. The line offered both freight and passenger excursion service, often transporting movie stars and other famous guests 6,000 feet upwards into the grand mountains. 58 wooden bridges were constructed, including one "S" bridge (formed by two reverse curves) at a length of 338 feet.

With the arrival of US Route 82 to Cloudcroft around 1945, traffic on the railroad line diminished. Southern Pacific discontinued passenger service in 1938, and freight service in 1947; abandonment of the line came soon after in 1948. The town of Cloudcroft itself continues to thrive today as an attractive tourist destination.

The only evidence of the railroad line today is the remains of the trestle over Mexican Canyon, as seen in these pictures.