As a solution to the financial difficulties the Western Australian timber industry suffered during the 1860s, the
state's governor,
Frederick Weld, proposed awarding large timber concessions on attractive terms to attract investment from the eastern states of Australia. Of the three timber concession made by Weld, the one at Jarrahdale was the largest, at . As part of the concession to a syndicate from
Ballarat, Victoria, it was agreed that a mill would be established at Jarrahdale, a port at
Mangles Bay and a railway line to connect the two. The mill started operations in May 1872 and the railway line opened in November that year. In the 1880s and, again, in the 1920s as part of the
Peel Estate scheme, it was proposed to build a railway from
Fremantle to Rockingham, where it would connect to the existing line to Jarrahdale, a scheme never carried out. This arrangement caused the Rockingham line to decline in importance and the last shipment of timber from there took place in 1908. When the state's timber industry experienced another boom in the 1920s, timber from Jarrahdale was shipped through Bunbury. The line to Rockingham did however remain in use for firewood supplies, allowing Millars to retain the rights to operate the railway. The final firewood train to Rockingham operated in 1940 and the line from Mundijong to the port was removed in 1950. The Jarrahdale to Mundijong section was retained longer, finally ceasing operations in November 1962, after 90 years. This made it the longest-operating timber railway in Western Australia.
A new railway line, to transport bauxite from Jarrahdale to Kwinana, was built to replace the timber railway and follows the old line in many places. ==Legacy==