The Fort Worth and Rio Grande Railway Company was chartered on June 1, 1885, to build from Fort Worth to Brownwood, a distance of 127 miles. A branch was also proposed from Logan's Gap in Comanche County to Coleman in Coleman County, a distance of 40 miles. The capital was $200,000, and the business office was in Fort Worth.

Members of the first board of directors included Edmund A. Morse of Rutland, Vermont; W. D. Nichols, Thomas G. Rigney, and S. B. Bostwick, all of New York; and W. W. H. Lawrence, Buckley B. Paddock, Thomas Roche, W. L. Lase, and Charles Swasey, all of Fort Worth.

Work on the line began on November 23, 1886, after Paddock persuaded the Vanderbilt railroad syndicate to fund its construction. Both Fort Worth boosters and the Vanderbilts dreamed of building a transcontinental route linking New York City, Fort Worth, and Topolobampo Harbor on the Pacific coast in Mexico. Fort Worth businessmen also believed the Fort Worth and Rio Grande would strengthen the local economy by bringing foreign trade, the Southwest Texas livestock business, and additional service and distribution facilities to Fort Worth.

In actual operation, the road fell far short of these goals. Construction was slow, and the route was changed many times before the tracks reached Granbury, 40 miles away, in October 1887. The line was extended 74 more miles to Comanche by early 1890, and an additional 30 miles to Brownwood in 1891, bringing the total miles of track to 144.

In 1892 the company owned ten locomotives, 99 freight cars, and nine passenger cars and earned $64,990 in passenger revenue, $164,435 in freight revenue, and $11,364 in other revenue.

The road was acquired in 1901 by the St. Louis and San Francisco Railway Company (Frisco), which financed a 50-mile extension to Brady that opened in 1903 and an additional 27 miles to Menard in 1911. Although other extensions were considered, Menard remained the end of the line. In order to increase its livestock traffic once it reached Brady, the Fort Worth and Rio Grande built a 100-mile long fenced and watered cattle trail between Sonora Brady. This trail was cut back to Menard once the railroad reached that point. The company also explored for coal in Coleman County.

The railway's immigration policy, which aided in the development of Southwest Texas through establishment of the Luverne Colony in Crockett County, co-sponsorship of the Texas Spring Palace, and organization of the "Karporama Car" (the state's first traveling immigration exhibit), was the company's only success. (Karporama is a "Texas Greek" formation on the Greek word for "fruit," which is here generalized to mean "resources" or "products"; hence "resources exhibit car.")

In 1931 the Fort Worth and Rio Grande was classified as a Class I railroad by the Railroad Commission. Earnings for that year were $670,502 but, as in most other years, the railroad operated at a deficit.

Although the road was controlled by the Frisco, it was independently operated until March 1, 1937, when it was sold to the Atchison, Topeka and Santa Fe Railway Company for $1,519,325.

The Fort Worth and Rio Grande was then leased to the Gulf, Colorado and Santa Fe Railway Company for operation, until it was merged into that company on December 31, 1948. The acquisition of the Fort Worth and Rio Grande shortened the Santa Fe route from West Texas to Fort Worth by 117 miles. Several sections of the former Fort Worth and Rio Grande were abandoned by the Santa Fe, including the 44 miles between Brownwood and Brady in 1959 and the 31 miles between Brady and Menard in 1972.