Puffing Billy was one of five narrow-gauge lines the Victorian Railways built around the turn of the twentieth century, laid to a slender two-foot-six gauge to twist cheaply through difficult country. Opened in 1900, it branched off the main network at Upper Ferntree Gully and wound its way through the ranges to the township of Gembrook, calling at Belgrave, Emerald and Cockatoo along the way. Its purpose was freight: sawn timber, farm produce, and the stock of the great Nobelius nursery, once one of the largest in the Southern Hemisphere. But the hills were beautiful, and by the 1920s holidaymakers had discovered the line, riding up to Belgrave for a day among the ferns. The leg-dangling open carriages, the famous NBH cars, were built for exactly these day-trippers between 1918 and 1919.

The railway never made money, not in a single year of its working life, and the Victorian Railways watched it dwindle. After the Second World War, services thinned to a single train a week and a road bus. Then, in 1953, a landslide buried the line between Selby and Menzies Creek, and that was apparently that. The railway was formally closed in 1954, judged not worth the cost of reopening. It should have been the end. A handful of farewell trips ran on the still-usable stretch to Belgrave, and to everyone's surprise they were mobbed, the public turning out in numbers that made plain how much affection the old line still commanded. That affection would prove to be its salvation.

On 1 October 1955, Harold Hewett and a group of enthusiasts formed the Puffing Billy Preservation Society, determined to keep the trains running indefinitely. They ran services to Belgrave until 1958, then set about rebuilding the line piece by piece. In a wonderful chapter, Rover Scouts attending a world gathering near Melbourne cleared the overgrown track between Belgrave and Menzies Creek as their community-service project, and in July 1962 the trains ran again. The volunteers pushed on for decades, reopening to Emerald in 1965, to Lakeside in 1975, and finally all the way back to Gembrook in 1998, where the first trains were filled with children from the schools along the line. From signalmen to gardeners, the railway is still, at its heart, run by volunteers.

The railway's modern story includes a hard truth that it has chosen to confront rather than bury. A long-serving senior volunteer, Robert Whitehead, was found to have committed decades of child sexual abuse connected to the railway and other heritage organisations, and a 2018 report by the Victorian Ombudsman found that those in charge had known of his conduct and protected him. The findings were damning, and the organisation did not look away from them. In 2022 the Victorian Parliament replaced the old governing board entirely under the new Puffing Billy Railway Act, overhauling the railway's governance and its child-safety obligations. The reforms were a direct response to the failures the Ombudsman exposed, and an acknowledgement that the trust the survivors were owed had been betrayed by the very people meant to keep them safe.

The railway owns every surviving Victorian Railways narrow-gauge locomotive, and has restored almost all of them to steam, among them the trim little 2-6-2 NA-class engines and the powerful articulated Garratts that can haul up to eighteen carriages where the smaller engines manage twelve. A South African Garratt, imported and re-gauged, joined the fleet in 2019. On a clear day the train labours up through forest so dense the light turns green, the engine working hard against the grade, smoke and steam streaming back over the open cars. The Monbulk Creek trestle bridge, a graceful timber curve, is the most photographed spot on the line. Nearly half a million passengers a year ride it now, most of them with their legs swinging over the edge, doing exactly what they came to do.