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The first railway line in Mongolia was a narrow gauge (750mm) line connecting the capital, Ulaanbaatar, with the coal mines of Nalaikh, some 33km distant. It opened in 1938.

During World War II, Japanese forces occupied Manchuria in northern China. The Soviet Union saw this as a threat and despite a non-agression pact signed between Russia and Japan in 1941, built up a strong military presence in eastern Mongolia, then effectively a satellite country of the Soviet Union. There were three bases at Sanbeis, Matad and Tamsagbulag. The bases were constructed in secret and much of their history was unknown until recently. Only in 2015 did a team of Japanese archaeologists confirm that the three bases were served by a railway. The Russian (1520mm) gauge railway diverged from the Manchurian branch of the Trans-Siberian Railway at Borzya and crossed into Mongolia to serve the bases. Its total length was around 400km, and it appears to have been completed in 1943. A section of the line as far as Choibasan was retained after the War, and appears to be still active today. From 1988 to 1993 there was a branch north from Choibasan serving a uranium mine at Mardai.

The most important line in Mongolia, the main line connecting Russian and China, passing through the Mongolian capital, Ulaanbaatar, did not arrive until later. The first section to Ulaanbaatar opened in 1950, its extension to the Chinese border in 1955. It was built to Russian gauge, necessitating a change of gauge at the border with China.

This international route remains highly significant to the country today. It carries considerable through passenger and freight traffic, and is popular with tourists. A number of branches serve various communities and mineral locations, although they do not reach the more remote parts of the country. There remain a few mineral lines in remote areas, some of which cross the Russian or Chinese border. In 2008, the government initiated a policy of rail expansion. A contract was awarded in 2013 to build a 217km line linking a coal mine at Tavan Tolgoi, 540km south of Ulaanbaatar, to a point near the Chinese border. There it will meet a 40km standard (1435mm) gauge line crossing the border and connecting with the Chinese network. Contracts for the latter line were concluded in 2014. Gauge changing facilities will be provided where the two lines meet.

In a private initiative, Aspire Mining Limited is promoting a 547km line running west from the existing network at Erdenet to mines at Ovoot. A branch to Moron from this line is proposed for a later date, as is an extension from Ovoot to Arts Suuri on the border with Russia, where it would met a new line of Russian Railways from Kyzyl and Kuragino on the Trans-Siberian Railway.

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Flag image from CIA World Factbook