By the early 1850s, railroads were eclipsing canal technology in the U.S. Railroads were not only cheaper to build and maintain, they were considerably more versatile than canals. Rail lines were not restricted to circuitous water-level routes or dependent on erratic rivers like their canal counterparts. And transportation by railroad was much faster than by canal, which was restricted to a walking pace. Indeed, the railroad seemed to offer everything canals could not. Unable to compete, most of the country's canals eventually succumbed to the ever expanding railroad network.

By 1855, the struggling Whitewater Valley Canal Company was in the hands of a receiver and by the early 1860s the canal could no longer support reliable navigation. In 1865, the Whitewater Valley Railroad acquired the canal at auction, and two years later it laid its tracks over the towpath of the Cincinnati & Whitewater Canal from Valley Junction, Ohio to Harrison, then over the towpath of the Whitewater Canal from West Harrison, Indiana to Hagerstown.

Though never a major trunk line, the Whitewater Valley Railroad served its customers well. It linked communities like Metamora and Brookville to a vast network of rail lines that, by 1869, spanned the continent from coast to coast.

The Whitewater Valley Railroad, however, soon found itself in financial trouble. In 1890 it leased itself to the Cleveland, Cincinnati, Chicago, and St. Louis Railroad--better known as the "Big Four." In 1930 , the Big Four was incorporated into its parent company, the New York Central. In 1933, the New York Central terminated passenger service on the Whitewater Valley line--a decision that reflected the ever increasing popularity of the private automobile. By 1932, one could drive on the new U.S. 52, which continues to parallel the old canal route from Metamora to Harrison.

In 1968, the merger of the New York Central and Pennsylvania Railroads brought the Whitewater Valley route under control of the Penn Central. Freight operations over the line between Connersville and Brookville came to an end in 1972. The non-profit Whitewater Valley Railroad then leased the line between Connersville and Brookville from Penn Central for excursion purposes.

In 1974, a section of track between Metamora and Brookville washed out. Having decided to not fix the damaged track, Penn Central abandoned five miles of track between the north end of Brookville and about two miles south of Metamora. In 1983, the Whitewater Valley Railroad Museum purchased the Connersville to Metamora track from Penn Central. Whitewater Valley Railroad Museum continues to operate passenger excursions to the end of the track south of Metamora.

Today, the Whitewater Canal Trail occupies much of the abandoned Penn Central roadbed (formerly canal towpath) from Metamora to the Twin Locks, and again at Yellow Bank Creek. The Indiana & Ohio Railroad continues to service Owens Corning at Brookville via the old canal route between Brookville and Valley Junction, Ohio.