The Virginia and Truckee Railroad is one of the most famous short lines in American history. It was incorporated on March 5, 1868 by the "Bank Crowd" to serve the mines of the Comstock. A railroad was deemed necessary because of the high cost of freighting goods by wagon into and out of Virginia City, and the need to carry ore to the mills along the Carson River.

The Comstock region posed peculiar problems for railroad construction because of its difficult terrain. Isaac ("Ike") James was selected as its surveying and construction engineer. The building of the Virginia and Truckee proved to be a remarkable achievement. James held the grade to a maximum of 2.2 per cent as the railroad descended 1,600 feet in thirteen and a half miles from Virginia City to reach the mills along the Carson River. To achieve this, the track had to make the equivalent of seventeen complete circles. Most of the work was done by Chinese labor.

The initial twenty-one miles from Virginia City to Carson City was completed on November 29, 1869. The construction to a terminus at Reno, thirty-one additional miles, finally connected the Comstock to the transcontinental Central Pacific Railroad on August 24, 1872.

Virginia City boomed with the discovery of the Big Bonanza in 1873, and the Virginia and Truckee enjoyed stunning success and prosperity. At the Bonanza's height, the railroad worked twenty-four locomotives and scheduled as many as forty trains a day on a single track. Its refitting facilities were capable of repairing its own and other railway companies' equipment. The railroad transported valuable ore from the Comstock, and, in return, Virginia City and Gold Hill received timber to shore up mines and build homes.

By 1878, the Big Bonanza had played out and mining production collapsed, although mining on the Comstock would continue on a relatively minor scale for over sixty years. The Virginia and Truckee kept operating on a much reduced scale. Hopeful of future bonanzas elsewhere, the Bank Crowd in 1880 incorporated and built the Carson and Colorado Railroad which connected with the Virginia and Truckee at Mound House, and which thrust southward into the desert for 293 miles to Keeler, California. Unfortunately, since its route went from nowhere to nowhere, it generated no particular traffic.

In 1900, the strapped Virginia and Truckee sold the Carson and Colorado to the Southern Pacific Railroad, just in time for its sold progeny to take advantage of the Tonopah and Goldfield mining booms. Whatever traffic was interchanged with the Virginia and Truckee at Mound House was stopped when the Southern Pacific built a more direct route ("The Hazen Cutoff") to the central Nevada mining boomtowns. In 1906, the Virginia and Truckee constructed a fifteen-mile extension southward from Carson City to the newly created town of Minden, which transformed the railroad into primarily a carrier of agricultural products.

From 1869 to 1910, Henry Yerington served as the line's Vice President and General Manager. Darius Mills was president until his death in 1910 to be succeeded by his son Ogden Mills who died in 1929–in turn followed by his son, Ogden Livingston Mills. In 1929, straight passenger service from Virginia City to Reno ended and the road paid its last dividend.

Until Ogden Livingston Mills' untimely death in 1937, he cheerfully picked up the bills for the declining railroad. His estate was not so accommodating. The road filed for bankruptcy in 1938 and service on the original line of track from Virginia City to Carson City ceased that same year. At first it looked as if operations might have to be shut down entirely, but an upswing in interest by rail fans–and the sale of equipment to Hollywood studios–kept the road going. But competing automobile and truck traffic, the road's financial inability to invest in new equipment, and deferred maintenance spelled its doom. The last run on the Virginia and Truckee was on May 31, 1950.