This line was built by the El Paso and Northeastern Railroad (later the Southern Pacific Railroad) near the turn of the 20th Century in order to access coal deposits around Capitan, NM. As the EP&NE was building north through New Mexico, they swung east at Carrizozo and headed to Coalora, and ultimately extended beyond Coalora another 2 miles to nearby Capitan, to the southwest. Between Carrizozo and Coalora, the line utilized two switchbacks in order to cross Indian Divide, just south of Vera Cruz Mountain.

Due to the difficulty of mining the coal in the area, and the much more readily-accessible coal mines to the north at Dawson, NM, traffic on the line, while strong at first, decreased rapidly. Sources differ on when the line was abandoned. One reference claims abandonment of the line came in 1905, only 5 years after the line first opened. However, the line shows as active on a USGS topographical map published in 1937.

The right-of-way closely follows US 380 and crosses adjacent Salado Creek a number of times west of Capitan.

At Carrizozo, the EP&NE continued construction northward as the El Paso and Rock Island Railroad from the eastward turn to Capitan, ultimately reaching Santa Rosa, NM and a connection with Chicago, Rock Island & Pacific Railway.