The Philadelphia, Easton and Water-Gap Railroad Company was incorporated in Pennsylvania on April 6, 1852, and renamed the North Pennsylvania Railroad Company on October 3, 1853.

The company's object was to link Philadelphia with northeastern Pennsylvania and central and western New York, but it was only able to construct a line as far as Bethlehem (1853-1857) with a branch to Doylestown (1856), relying on connections with the Lehigh Valley Railroad at Bethlehem. As it occupied a minor traffic corridor, the North Penn was a relatively weak road until 1874, when it built a branch from Jenkintown to the Delaware River at Yardley which became a link in a second route between New York and Philadelphia. The so-called "New Line" opened on May 1, 1876, in time for traffic to the Centennial.

The New Line made the North Penn a more attractive property. The Philadelphia & Reading Railroad Company negotiated a long term lease on May 14, 1879, and the road was thereafter operated as part of the Reading system. This situtation lasted until the Reading entered bankruptcy in 1971. After several failed attempts to reorganize, the viable portions of the Reading lines were conveyed to Conrail on April 1, 1976. The North Penn then began selling off its remaining real estate and was finally liquidated between 1982 and 1990.