The Stephenson Railway Museum was opened in 1986 to house the railway collections of Tyne & Wear Museums. Its name commemorates George and Robert Stephenson, the great steam railway pioneers.

George Stephenson lived locally from 1802 until 1823 and Robert was born in 1803. Some of the exhibits are from the collection formed in the 1930s at the former Museum of Science and Industry in Newcastle, one of the earliest museums of its kind outside London. It includes George Stephenson's Billy, a forerunner of The Rocket - Billy was built in 1826 and it last ran under its own power in 1881 to mark the centenary of George Stephenson's birth. The locomotive began life as a development of Stephenson's 'Killingworth Travelling Engine', and was probably the first commercially successful form of locomotive. Billy's daily task was to haul wagons of coal to the shipping staiths on the River Tyne.

Exhibits also focus on how electricity revolutionised transport in the early 1900s with an interactive multimedia display of the Harton Electric Railway and one of the nine electric trains supplied by Siemens between 1907 and 1913 to the Harton Coal Company of South Shields which operated collieries in South Tyneside at Harton, St Hilda, Boldon, Whitburn and Westoe. The locomotive is kept in full working order.

The Museum is also the northern terminus and maintenance workshop for the North Tyneside Railway. The railway operates mainly on summer weekends to and from Percy Main on the Tyne & Wear Metro system using steam locomotives to haul most trains. There are displays and exhibits which both illustrate the vital part railways have played in the region's history and also show how they continue to be relevant to today's transport needs.