The Great Western Railway took over the North Pembrokeshire and Fishguard Railway in February 1898 with a specific dream: poach the trans-Atlantic passenger trade away from Plymouth and Southampton. Fishguard Bay sat closer to New York than either of those ports, and the GWR planned a purpose-built ocean liner terminal here. Work began on the East Breakwater in 1899, along with a new two-mile cutting and tunnels to bring the railway down to the proposed deep-water berths. Within two years, the engineers realised the harbour would silt up faster than dredging could clear it. The East Breakwater was abandoned half-finished. Two completed sections of new track were never used. So the GWR pivoted. It blasted the North Breakwater out of the headland at Goodwick instead, and the quarried-out hollow became the new quay.

Fishguard Harbour station opened on 30 August 1906, the day the Waterford and Cork ferry services arrived from their previous Welsh terminal. Three years later, on the exact anniversary of the opening, the Cunard liner RMS Mauretania called at Fishguard, the first of the great Atlantic ships to do so. It was also one of the last. The harbour was too shallow for the Mauretania to come properly alongside, so her passengers had to be ferried ashore by tender to catch the boat train to London. The GWR built a smaller inner breakwater, sometimes called the Mauretania Mole, hoping to coax larger ships in, but the silting only worsened. The ocean liner trade went elsewhere. Fishguard kept the Irish boat trains, and that is what it has remained: a ferry terminal with railway tracks running into it.

For most of the twentieth century, Fishguard had through trains to London Paddington, an InterCity 125 service that ran by day and by night, connecting Wales to England's capital in a single straight shot. British Rail ran them, then First Great Western, then Wales and West, then Wales and Borders, then Arriva Trains Wales. In 2003 the last direct Paddington services were withdrawn, ending almost a century of continuous through running. The night service kept going, however, sometimes from London Waterloo connecting with Eurostar arrivals from Paris, sometimes empty stock running back to Carmarthen for storage. The day service ran via various routings, occasionally using the Carmarthen avoider line, occasionally the Swansea District Line, occasionally a route round the back of Landore depot known as the Swansea Avoiding Line. Railway timetables are how Britain talks to itself.

By 2011 the Fishguard branch had been reduced to two boat trains a day, one at lunchtime and one in the small hours, both timed solely for ferry connections. Two teenagers from Moylegrove decided this was not enough. They gathered 1,440 signatures on a petition asking for proper local rail services, presented it to the Welsh Government, and were heard. From September 2011 the branch gained five extra trains each direction, the first non-ferry services to call at Fishguard Harbour since 1964. The Welsh Assembly funded the experiment to the tune of 1.4 million pounds a year. Services were trimmed back during the COVID-19 pandemic, but as of 2024 the branch runs six trains Monday to Saturday and three on Sundays, connecting to Carmarthen, Swansea, and Cardiff Central. The teenagers, now adults, may still be on the train.