The idea of building a railway between York and Leeds was first discussed in 1833. George Hudson, the chairman of the North Midland Railway, was the line's main supporter. Hudson had already commissioned George Stephenson to build a line between Leeds and Derby. He now asked him to construct a railway between York and Leeds.

Opened in 1839, the York & North Midland Railway became part of the great trunk route from London to York via Rugby and Derby. At Milford the railway was linked to the Leeds, Selby & Hull line. Hudson's employed Robert Stephenson to build a branch line to Scarborough and this was completed in 1845. At £6,000 a mile, it was one of the cheapest railway lines ever built in Britain.

As a result of being involved in dubious business activities, George Hudson was forced to resign as chairman of the York & North Midland Railway in 1849. Six years later the company was taken over and became part of the North Eastern Railway.