The Ahnapee and Western Railway started in 1890 by local landowner Edward Decker. Seeking to spur the economy in the Door Peninsula of Wisconsin, he envisioned a short line connecting the Green Bay and Western at Casco into the heart of the peninsula at the town of Sturgeon Bay. The track was completed from Casco Junction to Algoma (formerly called Ahnapee) on Lake Michigan in 1892, with the remainder of the line to Sturgeon Bay completed in 1894, bringing total distance of the A&W to 35 miles. Access to Sturgeon Bay proper was via an existing toll swing-style bridge across the ship canal.

The GB&W purchased the A&W in 1906. At the time, freight was mostly local grains and produce. Passenger service thrived, as it was one of the only reliable means of transport on the swampy peninsula. However, the Great Depression, along with gaining popularity of cars and trucks at the time, brought an end to passenger service in 1937.

In 1947, the GB&W sold the A&W back to local interests.

With the ship canal bridge in Sturgeon Bay suffering due to insufficient maintenance, and Sturgeon Bay's primary shipper going out of business, the A&W was abandoned north of Algoma in 1968.

In 1970, the A&W was sold to the McCloud River Railroad, itself a GB&W subsidiary.

In 1986, a washout of the bridge over the Kewaunee River spelled ultimate doom for the A&W, as its repair was deemed too costly in relation to the struggling finances of the railroad. The GB&W opted to abandon the remainder of the A&W later that year.

Today, the right-of-way serves as the Ahnapee State Rail-Trail.