Rail streetcar service in Grand Rapids began on May 10, 1865, and ran from the Detroit & Milwaukee Railroad Depot to Canal Street. The Grand Rapids Street Railway Company was soon joined in competition with additional lines, among them the Division Street Line, Reed's Lake Line and the Scribner Avenue Line. These and other early horse powered lines were merged into the Street Railway Co. of Grand Rapids in 1883. In 1887, the Valley City Street and Cable Co. was granted a franchise to a line from Canal to Union., bringing service to the hill district. In 1888 the construction was completed and the first cable car made a run on April 18. Several new routes were soon open to the Valley City Street and Cable Co. and competition with the Street Railway Co. was soon bringing confusion and hardships to customers, as connections between the two lines did not exist. These companies agreed to merge in 1890 as the Consolidated Street Railway Co.

The Consolidated Street Railway Co. immediately resolved a labor dispute through negotiations. The next strike against the new company was much harder to fight. The reconstruction of the systems into one upgraded system was not completed when the Panic of 1893 hit Grand Rapids. Several local industries failed, including the Nelson & Matter Co. and John Widdicomb Co. Other factories were idle. With the Grand Rapids economy at a standstill, the Consolidated Street Railway Co. was crippled. In 1900 the company was bought out by E.W. Clark & Co. of Philadelphia, PA, and reincorporated as the Grand Rapids Railway Co. Under the new management, the Grand Rapids Railway Co., with sufficient operating funds, became a model of street railway systems and won several national awards. This system continued until driven out of business by automobiles and buses in the 1930s.