The original Wairarapa Line, opened in 1878, crossed the Remutaka Range via the Rimutaka Incline, a harrowing stretch of track that used the Fell centre-rail system to haul trains up grades of 1-in-15. Criticism began before the incline was even finished. In 1898, surveyor J.H. Dobson investigated alternatives for the Public Works Department. A 5-mile tunnel between Mangaroa and Cross Creek attracted serious attention and nearly won approval before cost estimates killed it. The 1920s brought renewed campaigning and another feasibility study. Parliament even authorized a deviation in 1924 under the Railways Authorisation Act, but nothing happened. When the Labour government of 1936 announced it would proceed with the Mangaroa-to-Cross Creek tunnel, detailed surveys were completed by 1939. Then World War II stopped everything. After the war, the aging H-class Fell locomotives and the deteriorating incline made a replacement urgent. Between 1945 and 1947, four options were evaluated. The conclusion was clear: only a tunnel would do.

Construction began in 1948 with the Public Works Department boring initial shafts at both ends. In May 1951, the main contract went to a consortium of Morrison-Knudsen and Downer, known as MKD. Work advanced from the western portal in July and the eastern portal in August. About 600 people worked for MKD at peak, most of them single men living in huts at camps near the Mangaroa and Featherston portals, with cookhouses, mess halls, and 20 houses at each end for married staff. The tunnel was partly excavated using full-face boring rather than the traditional heading-and-bench method, a faster but riskier approach. Three workers died during construction. The raw numbers hint at the scale: 299,258 kg of gelignite, 327,850 detonators, over 3 million litres of diesel fuel, and 26,163 tonnes of cement. The contract was expected to take four years, but the headings met ahead of schedule, with the concrete lining finished a month later.

New Zealand Railways took possession of the completed tunnel on 1 February 1955 and began laying track immediately. By October, signalling and centralized traffic control were installed. The final challenge was a section near Upper Hutt where the old line crossed the new alignment at a higher level. On the evening of 29 October, the Carterton Show Day excursion train arrived at Upper Hutt, and all traffic on the Upper Hutt-to-Featherston section was suspended. Over the next three days, crews removed the old formation, cut the new alignment to grade, and laid the remaining track. On 3 November 1955, two special trains travelled from Wellington to Speedy's Crossing for the inauguration ceremony. The Wairarapa Line became New Zealand's first fully dieselised railway, because the 8.93 km tunnel was simply too long for steam locomotives to operate safely.

The tunnel rises at a gradient of 1-in-400 from the western portal to its highest point, roughly at the midway mark, then descends at 1-in-180 to the eastern portal. Its internal dimensions are modest: 5.18 metres high by 4.68 metres wide, lined with concrete at least 38 cm thick. After completion, tests revealed that diesel locomotives would not generate enough airflow for natural ventilation. A 2.74-metre-diameter vertical shaft was driven 117 metres upward from the tunnel's midpoint to the surface beside the Remutaka Rail Trail, near the old Pakuratahi Tunnel. The original plan had called for electric traction, extending Wellington's 1,500-volt DC catenary beyond Upper Hutt, but economic studies favoured diesel. The tunnel was designed so that catenary could be installed later. Decades on, it still has not been. In 2007, the Greater Wellington Regional Council rejected electrification on the grounds that patronage did not justify the expense.

The Remutaka Tunnel carries both the Wairarapa Connection commuter service and freight trains hauling logs and timber products from the Wairarapa to Wellington. DFB-class diesel-electric locomotives have been the primary traction since 2015. Staff carry gas detectors through the tunnel as a safety precaution; in May 2021, unsafe nitrogen dioxide levels triggered alarms on a morning service, and trains were replaced by buses for a week. From late December 2024 to February 2025, the tunnel closed for its first major overhaul in nearly seven decades. Over 47 days, crews laid almost 9 kilometres of new track using composite sleepers. The overhaul caused significant disruption, with only 17 percent of Wairarapa trains running within five minutes of schedule during February 2025. The Remutaka Tunnel remains the longest tunnel in New Zealand served by scheduled passenger trains, a distinction it has held since the Kaimai Tunnel near Tauranga surpassed its overall length by just 100 metres in 1978.