The first railway in Uruguay opened in 1868 between Bella Vista and the La Paz river, a distance of about 12km. The line was extended across the river and into Las Piedras later in the year, being officially inaugurated on 1st January, 1869. It was built to standard (1435mm) gauge, also used for the greater part of the subsequent expansion into most parts of the country. A number of important narrow gauge lines, of various gauges, were also built but these have all closed, except for a short section of one line
Passenger and freight services had declined considerably by the start of the 21st century and many lines had closed. A program of rehabilitation and reopening is being undertaken for freight traffic, but revival of passenger traffic has been very slow. In 2012, a service was inaugurated on the line betweeen Montevideo Nueva Terminal and 25 de Agosto was introduced in 2012. Trains operate twice daily, with extra trains within the urban area. By 2018, a daily service was operating between Nueva Terminal and Sudriers.
In December, 2018, a thrice weekly passenger service was introduced between Tacuarembó and Rivera, the first stage of a projected reopening of the 310km route from Paso de los Toros to Rivera.
There is an international connection with Argentina at Salto. An international connection with Brazil takes the form of a line across the border to Santana do Livramento, where the standard gauge tracks of AFE interchange traffic with the metre gauge tracks of Rumo ALL in Brazil.