The railway line from Lilydale to Yarra Glen was officially opened in May 1888. The line continued on to Mount View Range, Tarrawarra but did not extend through to Healesville until 1889 because of difficulties in the construction of the tunnel.

The first survey for the Lilydale to Healesville railway was for a line which followed the coach road (now the Maroondah Highway) via Coldstream. Due to political lobbying the route was revised via Yarra Flats and Tarrawarra. The new route across flood plains and through the Mount View Range blew out the estimated cost from £35,276 to £148,987.

The successful contractors were Messrs McNeil and Bath.

The viaduct across the Yering flats required 300 red gum timber piles which were hauled from Nagambie. Some of the piles had to be sixty feet long. Eight hundred men were employed, twenty bullock teams and a dozen six-horse teams. The viaduct was 2 kms long with 502 spans of 4 metres each.
One immediate effect of the railway on the district was a change of name from Yarra Flats to Yarra Glen and a re-location of businesses and buildings to the southern end of Bell Street.