First built in 1906, the line south out of Hood River extended as far as Dee. The line was extended In 1909 to the present-day end of track at Parkdale. The Union Pacific acquired the line in 1968 and operated it with the primary customers being fruit shippers and the lumber operation at Dee. As local industries switched to truck-based transportation for their goods, service on the line dwindled and the Union Pacific proposed scrapping the line. Instead a local group purchased it in 1987. The line was sold again in 2008 to Permian Basin Railways.
The MHRR still exists today, thanks to Permian Basin Railway. The line offers four-hour scenic tours through the Hood River Valley and narrated historic excursion train tours, as well as special events. There are views of Mount Hood and Mount Adams at various spots along the line, along with one of the last remaining switchbacks in North America.
The Mount Hood Railroad has served as an economic lifeline for the Hood River Valley, carrying fruit, and forest products to market since 1906. In the 1920's and 30's, area residents used the railroad as a commuter train linking Hood River and Parkdale to the vast Union Pacific Network, which served Portland/Seattle one direction and Salt Lake Lake, Denver, Chicago and the rest of the U.S. the other.