Work on what was to later become the Costa Rica Railway Co. Ltd. started in 1871 both between Alajuela and the capital, San Jose; and westwards from Limon on the Caribean coast and intial sections were opened in 1873. After financial difficulties the eastern end was extended to Carrillo in 1882 leaving mules to transport traffic from here to the capital up a steep and narrow pass. A railway could have only traversed this pass by the use of a rack or reverses. So when construction started again in 1886, this time by the Costa Rica Railway Co. Ltd. it adopted an entirely new route west from Siquirres and this new 83km long section to Cartago was opened in 1890. After many problems, the concession was leased to the Northern Railway Co. in 1905. This section up to the continental divide was plagued by problems with washouts and an unstable formation and has been closed since 1988.
The Pacific railway from Puntarenas to San Jose was built in fits and starts over many years between 1854 and 1910, the first section from Puntarenas having started life as a horse drawn tramway. A decision was made in the 1920s to electrify the line to reduce operating costs and increase capacity and operations started in April 1930.
These railways, both of 3ft 6in gauge, were merged into the Ferrocarriles de Costa Rica at the beginning of 1977 and vested into the Instituto Costarricense de Ferrocarriles in 1985. Lack of funds for maintenance and bloated operating costs through overmanning caused the government to shut down all railway operations in 1995.
Limited operations have recommenced on various parts of the network amongst ongoing talk of privatisation.

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