This underground funicular railway opened in 1893 linked the Clifton area of Bristol with Hotwells and Bristol Harbour at the bottom of the Avon Gorge, via a steep tunnel cut through the limestone cliffs. The upper station is situated adjacent to the Clifton Suspension Bridge and near the former Grand Spa Hotel (now the Avon Gorge Hotel). The lower station was opposite the paddle steamer landing ferries in Hotwells, the Hotwells station of the Port Railway, a terminus of Bristol Tramways and the Rownham ferry which crossed the river Avon.

An early proposal for an inclined railway fom the north end of the Suspension Bridge down the face of the Avon Gorge to Hotwells was madein July 1880 byGeorge White, founder of the Bristol Tramway Company and later founder of the Bristol Aeroplane Company; it was rejected by the Society of Merchant Venturers, owners of the cliffs, as they thought it would be eyesore. Ten years later, the Society approved a proposal fromGeorge Newnes, publisher and MP for Newmarket, for an inclined lift tunneled through the rock from Hotwells Road to the garden ofNumber 14 Princes Buildings, the row of houses which now incorporates the Avon Gorge Hotel.

Newnes was given additional obligations by the Society, most notably a requirement to resurrect Clifton as a spa town by constructing a Hydropathic Institute adjacent to the proposed upper station and that the works should be finished by January, 1893.As the owner of the Lynton and Lynmouth Cliff Railway, Newnes used their engineer, George Croydon Marks. The total cost of the railway was estimated at £10,000; tunneling problems through the badly faulted limestone pushed the cost to £30,000 and the railway was never a commercial success. Sold in 1912 to Bristol Tramways, it struggled on until closure in 1934.

Behind the frontage of the lower entrance is the steep tunnel which emerges in the now derelict small triangle of ground between the junction of Princes Lane and Sion Hill which contains the long derelict Upper Station. The semi elliptical tunnel is 152 m (500 ft) long, with a roof height of 5.5m (18 ft) and a width of 8.4 m (27 ft6 ins). Rising vertically by 73m (240 ft), the tunnel has a gradientof 1:2.2, isbrick linedwith a wall thickness of 0.6 m (2 ft) and was lit by gas.

The upper station appears to be a small single storey triangular building of bath stone facing Princes Lane and the Avon Gorge. The Sion Hill elevation consists of iron railings between masonry piers. Travellers would descend down steps from either of the two entrances to a small platform under Sion Hill, with a series of arched roof vaults and substantial steel beams supported on cast iron columns support the street above. Part of the 4.6 m (15 ft) wide platform was covered by pavement lights, through which the public could observe the cars ascending and descending the tunnel. At the time of construction, the tunnel was the widest of its kind in the World.

The lower station was constructed inside the rock, with a stone facade standing flush to the rock face. Quoins and architraves were of bath stone with three decorative gargoyles above the three entrance arches. The windows set into the six arches of the upper floor offered wonderful views across the river. On the ground floor, one room lined with vertical pine matchboarding housed the turnstiles and pay box; the other contained the pumping machinery.

The line operated four cars, each with an upper passenger section above  a triangular chassis built by Gimsons of Leicester to accomodate the gradient of the tunnel. Constructed in Birmingham by Starbruck, each car could hold eighteen seated passengers, with a brakesman standing on a small platform at the end facing the river. The cars ran in pairs on adjacent tracks of flat bottom rail bolted onto concrete cross sleepers with a gauge of 0.91m (3 ft) and connected together by two steel wire cables which turned around large pulley wheels at the top of the tunnel.

Safety measures were exemplarary. Duplicate hydraulic brakes acted on both sides of the rails and a further set of duplicate brakes would automatically operate if the maximum speed was exceeded; a third set would operate should either of the other two systems fail or both steel ropes break.

Operated by water balance, as one car ran down its rail its companion car would be pulled up, the weight of the water plus passengers in the descending car overbalancing the weight of the passengers in the ascending car. An electric telegraph allowed the brakesman of the car at the bottom to advise the number of passengers to be raised and the correct weight of water required to be added to the top car to balance the load. Whilst the passengers disembarked, water in the tank of the car at the base of the incline was automatically emptied into a sump and pumped back up to a reservoir at the head of the incline by duplicate sets of pumps powered by self starting "Otto cycle" gas engines manufactured by Crossley of Manchester.

During the Second World War, after the installation of blast walls, the tunnel was used as offices by BOAC, as a relay station by the BBC and as an air-raid shelter. The BBC continued to use parts of the tunnel until 1960. A voluntary group has now been formed to preserve and restore the railway; the cost of restoration is estimated at around £15 million.