The Holenbrunn–Leupoldsdorf railway was built in two stages. First the Royal Bavarian State Railways decided on 15 August 1877 to link the town of Wunsiedel by a Lokalbahn to the main line from Hof to Holenbrunn being opened at the same time, and which was extended in 1878 from Holenbrunn to Marktredwitz. On 8 November 1913 the branch line was also extended from Wunsiedel to Leupoldsdorf. It is suspected that the extension of the route was driven by the owner of the Hammer castle (Hammerschloss) at Leupoldsdorf, a certain "Rosa von Müller". When the line opened, however, she was no longer in residence at the Schloss.