The Bangor and Portland Railway was found in 1879 by several Bangor, PA business men for the purpose of transporting slate from the surrounding quarries to the Lackawanna Railroad at Portland, PA. The Delaware, Lackawanna and Western Railroad (Lackawanna or DL&W), was the major railroad servicing markets in New York City, Northern New Jersey, Northeastern Pennsylvania, and up-state New York. The Bangor and Portland Railway Company started operation on December 1, 1880.

At the same time the Bangor and Portland Railway as under construction, the Bangor and Bath Railroad company was formed in July, 1880 in order to make 17 mile connection between Bangor and Nazareth, PA. During this time period the fledgling Portland cement industry was beginning to thrive which the founders of the B&P wanted to exploited. The Bangor and Bath Railroad merged into the Bangor and Portland Railway on October 16, 1880.

The route to Nazareth followed Martins Creek out of Bangor, PA as far as Nazareth Junction, now Martins Creek Junction, where it then followed Waltz Creek toward Pen Argl and Nazareth, PA. This meandering route was necessary to get around the Kittany Mountain Range. B&P Railway was able to tap into the Pen Argyl, PA slate region as a result of the expansion into Nazareth, PA.

A third company, the Chapman and Lehigh Railroad, was formed in July 1881 to build a line from Chapman's quarry to Bath and on to Catasauqua, PA. This line had no physical connect to the Bangor and Portland but was still merged into the company on April 24, 1881. This line was never completed by the B&P but years later by the Lehigh and New England Railroad.

An additional 4.6 mile branch was constructed from Nazareth Junction (Martins Creek Junctions) down to Martins Creek and across the Delaware River to Martins Creek Station, NJ where it connected with the Pennsylvania Railroad's Belvedere and Delaware or Bel. Del. Division. The Martins Creek Branch was completed on December 28, 1885. A final expansion of the line occurred in in 1887 when a 1.2 mile branch was built into Wind Gap, PA.