Note: Where possible, the correct Welsh spelling of proper names is used. Certain legal names (e.g. Acts of Parliament and company names) are used in their original form.
By the mid nineteenth century, the output of the Croesor valley's slate quarries had grown to the point where the exiting methods of transportation had become inadequate. In 1836 the Festiniog Railway had opened to serve the quarries in the neighbouring area of Blaenau Festiniog. The traffic on the railway had grown to such an extent that by the 1860 the board were planning to introduce steam locomotives.
Taking advantage of the increased capacity of the Festiniog was not an option open to the proprietors of the Croesor valley quarries. The land between the Croesor valley and the Vale of Ffestiniog is mountainous with very steep descents on either side, totally unsuitable for railway construction. The solution was to promote a tramway from the head of the valley to the sea at Porthmadog. Hugh Beaver Roberts, a solicitor from Bangor promoted the construction of a tramway to the harbour at Porthmadog.
The route was based on a survey by Charles Easton Spooner made in early 1863 and was in two distinct parts. The lower part of the line was to be built by means of a series of wayleaves from Porthmadog harbour to Carreg Hylldrem. Carreg Hylldrem is the rocky outcrop close to the point where the road from Penrhyndeudraeth to Beddgelert crosses the route of the tramway (map). The upper part of the line carried on from this point on land that was already leased to the quarry owners, becoming effectively a private tramway. The lower part is correctly named the 'Croesor Tramway', with the upper section properly named the 'Croesor tramway', never having had any official status.
The tramway was laid in 20 lb per yard wrought iron rails laid on wooden sleepers and from the first was intended for horse haulage. The only major construction on the lower section was the bridge at Pont Croesor over the Glaslyn, which consisted of 8 wooden spans of 25 feet supported by slate rubble piers. The tramway was opened to traffic in 1864.
The line's informal existence changed in 1865 with the passing of the Croesor & Portmadoc Railway Act. This incorporated the Croesor & Portmadoc Railway Co with a share capital of £25,000. The tramway was authorised to carry mineral, goods and passenger traffic and was defined as a line 4.5 miles long from Porthmadog to Carreg Hylldrem. The 1865 act authorised the construction of a western extension to Borth-y-Gest which was never built. The 'tramway' east of Carreg Hylldrem was not included in the formal railway and continued for the rest of its existence as a private line.
On 10th October 1867 the Aberystwyth & Welsh Coast Railway opened its standard gauge line between Barmouth and Pwllehli, giving both the Croesor Tramway and the Festiniog an alternative to onwards shipment by sea . The new line crossed the tramway on the level to the east of the main line station, an arrangement that was to provide a cause for dispute between the two railways' successors in the 1920s.
The line carried on as before, but appears to have got into financial difficulties. In 1869 Roberts proposed that the Festiniog Railway should take over the operation of the tramway. The FR board unanimously rejected the proposal 'until its track was put in order'. Following this, the line was mortgaged to Mary Elizabeth Littledale for £8,000.