From 1832 there were numerous proposals to build a branch line from Barnard Castle to the Stockton & Darlington Railway but these met with stiff opposition from successive Dukes of Cleveland, who owned most of the land around Barnard Castle. Eventually a Bill was approved in 1854 for a line from a junction with the S & D at Darlington to Barnard Castle. The line was built by the Darlington and Barnard Castle Railway opening on 9th July 1856 with intermediate stations at Broomielaw, Winston, Gainford & Piercebridge. The terminus at Barnard Castle only lasted five years.

In 1856 the South Durham & Lancashire Railway proposed a line from Bishop Auckland to Tebay via Barnard Castle and Kirkby Stephen with the Company receiving its Bill in 1857. This is a sparsely populated area and initially there were no proposals for a passenger service, the proposed line would carry iron ore from Barry in Lancashire to the blast furnaces of Teesdale, while in the opposite direction, coke and coal would be carried to the iron ore mines, which had flourished in the Furness district of Lancashire. The Act for the construction of this line which by now included a passenger service, encountered practically no opposition and the Royal Assent was granted on 13th July 1857 with work starting at Kirkby Stephen six weeks later.

The line opened on 8th August 1861 from a second terminus at Barnard Castle to a junction with the Lancaster & Carlisle Railway at Tebay with intermediate stations at Lartington, Bowes, Barras, Kirkby Stephen, Ravenstondale & Gaisgill.

The two stations at Barnard Castle were some distance apart necessitating a long walk. To alleviate this, the SD & LR station became a through station on 1 May 1862 and on the same day the original terminus was closed to passengers. After closure to passengers it remained in use as a goods depot. it was a fine building, in ashlar with hipped roof and a prominent cornice. Six windows with pedimented hoods  and a classical portico, since removed to Saltburn, all combined to present an attractive building. The building is now part of a residential complex.

Barnard Castle lost its passenger service on 30th November 1964 but the goods service was retained until 5th April 1965. The first station having served as a goods station until 1965 survived as a private house. The second was demolished in 1972 and subsequently became the site of a pharmaceutical plant.