By 1790, an extensive network of canals was in place in the Midlands, or under construction. However, the only route to London was via the Oxford Canal to the River Thames at Oxford, and then down the river to the capital. The river, particularly the upper reaches, was in a poor condition for navigation compared with the modern canals. The river suffered from shallow sections and shortage of water leading to delays at locks, with conflicts with mill owners over water supplies common.
In 1791–1792, two surveys of a route from Brentford on the Thames to Braunston on the Oxford Canal were carried out, first by James Barnes and then by William Jessop. There were other proposals for an alternative direct route to London, and two Bills were put to Parliament, but it was the Bill for the Grand Junction Canal which was passed on 30 April 1793.
The Act of Parliament authorised the company to raise up to £600,000 to fund construction. The act authorised construction of the main line from where the eastern branch of the River Brent enters the Thames at Syon House near Brentford, to the Oxford Canal at Braunston. It also authorised branches to Daventry, the River Nene at Northampton, to the turnpike road (now the A5) at Old Stratford, and to Watford: those to Daventry and Watford were not built.
William Jessop was appointed to take charge of construction which started almost immediately from the two ends. On 3 June 1793, James Barnes was appointed Engineer, at a rate of two guineas (£2.10) per day plus half a guinea (£0.52) expenses. At the north end, there were problems with the construction of Blisworth Tunnel: quicksand was encountered, and errors made in alignment which meant that the tunnel had a pronounced wiggle. With the opening of Braunston Tunnel, the line was open from the Oxford Canal through to Weedon Bec in June 1796. However, Blisworth Tunnel continued to cause problems, collapsing in January 1796. The canal was opened from Braunston to Blisworth in 1797. The canal from the Thames reached Two Waters near Hemel Hempstead in 1798, Bulbourne at the north end of the Tring summit in 1799, and Stoke Bruerne at the south end of Blisworth Tunnel the following year.
Thus with the exception of Blisworth Tunnel, the main line was open throughout in 1800. To allow goods to cross the gap, a road was built in 1800 over the top of Blisworth hill, and later, upon the recommendation of committee member Joseph Wilkes, Benjamin Outram was contracted to build a tramway over the hill.
James Barnes proposed that work begin again on the tunnel on a new line. Robert Whitworth and John Rennie were called in for advice, and supported this proposal. However, construction on the new line did not start until June 1802, and was not completed until March 1805.
Initially, nine locks were used in a temporary arrangement to lower and raise the canal for the crossing of the River Great Ouse at Wolverton at the river's water level. In 1799, William Jessop designed a three arch masonry aqueduct and embankment to cross the river and replace the locks. This collapsed in 1808, and a wooden trough was used as a temporary replacement. It was decided to build an iron aqueduct, with Benjamin Bevan as engineer. The foundation stone for the replacement aqueduct was laid on 9 September 1809, and it was opened on 22 January 1811.
The Grand Junction Canal had reduced the distance to London from the Midlands by 60 miles (100 kilometres)—via Oxford and the River Thames—and made the journey reliable. As a result it thrived: in 1810 it carried 343,560 tons of goods through London, with roughly equal amounts into and out of the capital.
The Grand Junction's original act in 1793 authorised branches to Daventry, the River Nene at Northampton, to the turnpike road at Old Stratford (north-west of the modern Milton Keynes), and to Watford in Hertfordshire: those to Daventry and Watford were not built. The branch to Old Stratford was amended before it was built (see below). The branch to Northampton was delayed as the plans of the Leicester and Northampton Union Canal to reach Northampton and thus join with the Grand Junction came to nothing. The link to Northampton was made by a tramroad transferred from Blisworth Tunnel, with the 5-mile (8-kilometre) canal from Gayton being opened in 1815. The link to Leicester was eventually achieved by the opening of the Grand Union Canal, which took a more direct route from Foxton in Leicestershire to the Grand Junction at Norton Junction.
The 1794 act authorised three further branches, to Aylesbury, Buckingham, and Wendover. The 6.5-mile (10.5-kilometre) navigable feeder from Wendover to the summit level at Tring was opened in 1799, while the 10.5-mile (17 kilometre) Buckingham branch, an extension of the original proposal for a link to the main road at Old Stratford, was opened in 1801: both eventually fell into disuse, though the Wendover Arm is undergoing active restoration, and part of it is again navigable. The Aylesbury arm was envisaged to become a through route to the Thames and thus the Wilts and Berks Canal and Kennet and Avon Canal, but the 6-mile (10-kilometre) branch into the town, opened in 1815, was never extended.
The act of April 1795 authorised a 13.5-mile (22-kilometre) branch to Paddington from Bull's Bridge near Hayes: this was completed in 1801, and with its large basin at Paddington and many wharfs along its length it became an important trade route, even more so with the subsequent opening of the Regent's Canal. This branch also acted as a source of water from the River Brent.
The act of June 1795 authorised a branch to St Albans: this was not built.
The last branch to be authorised and built was the 5-mile (8-kilometre) route to Slough, opened in 1882.
This list is incomplete. Among those missing are the act authorising construction of the Slough Arm, and acts in 1928 authorising the formation of the Grand Union Canal.
The importance of trade between London and the Midlands meant that railway competition was an early threat to this canal compared with others in the country. John Rennie undertook a survey in 1824 for a London to Birmingham railway.
There were also ambitious proposals for new canals. In 1827 there was a proposals for a London and Birmingham Junction Canal from the Stratford-upon-Avon Canal to Braunston. In 1832, William Cubitt proposed a Central Union Canal from the Worcester and Birmingham Canal near Worcester Bar via Solihull to the Oxford at Ansty, while in 1833 there were proposals for a London and Birmingham Canal, from Stratford direct to the Regent's Canal, which would bypass the Grand Junction Canal entirely. Together with the railway threats, the Grand Junction was spurred into making improvements.
The London and Birmingham Railway was completed in 1838, and, with the exception of the Oxford Canal, the canals on the route from London to Birmingham co-operated to reduce tolls to compete with the railway. As a result, traffic carried increased, but income was significantly reduced.
To cope with the traffic volumes, the locks at Stoke Bruerne were duplicated in 1835, and new larger reservoirs built at Tring to ease a serious water shortage. In 1848 the Grand Junction entered the carrying trade, pitting its boats directly against the railway competition. From 1864 steam narrow boats were acquired, working with a butty, and these penetrated as far as the Erewash Canal. Carrying was given up in 1876 because it did not pay.
By 1871 the tunnels at Braunston and Blisworth were becoming bottlenecks and steam tugs were provided to tow strings of waiting boats through.
Under the encouragement of major carriers Fellows Morton and Clayton, the Grand Junction bought the Grand Union Canal and Leicester and Northamptonshire Union Canal in 1894 and worked with other navigations to encourage more through traffic to London: the Grand Junction was concerned that through traffic was being deterred by the poor condition and high tolls of the railway-owned Cromford Canal and Nottingham Canal.
An inclined plane was opened at Foxton Locks in 1900, as part of a plan to enable wide barges to use the Grand Union Canal and thus bring more traffic onto the main line of the Grand Junction from the east Midlands. Widening of the locks at Watford was also planned, but not carried through. Consideration was given to constructing other inclined planes as part of a plan to enlarge the canals to carry 80-ton barges, but no more were built.
With ever more traffic going by rail, the canal's only significant weapon was low tolls: while this slowed the decline in volumes, it did so only by large reductions in income, and consideration was given to amalgamations with other canals.
Concerns began to develop about the state of repair of the canal via Warwick to Birmingham, on which the Grand Junction was reliant for a through route. In 1925, discussions began with the three Warwick canals and the Regent's Canal, and in 1926 a merger was agreed. The Regent's Canal bought the Grand Junction Canal and the three Warwick canals, and from 1 January 1929 they became part of the (new) Grand Union Canal.