The original line was opened on 16 June 1884, opening up rail access from the established station at Castlemaine to the towns of Muckleford and Maldon. The area was prosperous, as Castlemaine and Maldon had both experienced gold rushes in the preceding years, and local residents had been petitioning the state government for a railway since 1874. On 2 August 1884, a contract was let for an extension to Laanecoorie, however further construction was suspended after the line reached the small town of Shelbourne in 1891.
The line was served by twice-daily trains for the first forty years of its life, which was increased to four-times-daily trains in 1924. However, these were cut back at the end of the 1920s due to a decrease in the local population, and passenger services were eliminated altogether during World War II.