The Grantham Canal which opened in 1797 passed just over a mile north of the castle. This large Grade I listed building owned by the Dukes of Rutland had a large requirement for fuel and victuals. Jessop who built the canal advised against constructing a short canal branch as it would require several locks and a large reservoir of water. Eventually in 1814 it was decided to build a connecting railway between the canal and the house which by this time had become an even larger gothic mansion.

The Butterley company designed the railway and built it. The rails were 3 ft. fish-bellied lengths of cast iron resting on stone sleepers and it is believed that they were the first in the world to use the 'I' section form. The gauge varied between 4 ft. 41/2 in. and 4 ft. 5 in. and the wagons had wide treads. Haulage was by a single horse with two on the incline.

The line forked as it approached the castle ramparts,  one branch leading to a tunnel for the unloading of coal. The second branch follows the ramparts to the north east corner of the castle and terminates near the kitchens. Here are preserved three of the original wagons.

The final recorded use of the railway was in May 1918, and it was dismantled in 1941. The only surviving track is close to the house, though the trackbed can be traced in parts to the canal.