The line was authorised in 1900, and the Hon William Hall-Jones turned the first sod of the Stratford-Kawakawa Railway at Stratford on 28 March 1901 - Kawakawa, south of Ongarue, was to be the junction point with the North Island Main Trunk Line. Construction took nearly 32 years, and the western part, from Stratford, was operated as the Toko Branch in 1902. The SOL was nearly complete before the onset of the Great Depression, so work was not halted, unlike on many public works projects such as the East Coast Main Trunk Railway beyond Taneatua.
On 7 November 1932 the last spike was driven at Heao by the Prime Minister, the Right Hon. Gordon Coates, though the SOL was not handed over by the Public Works Department to the New Zealand Railways Department until 4 September 1933.
The SOL was initially served by the New Plymouth Night Express between New Plymouth and Auckland and by Stratford–Taumarunui passenger trains. Scheduled passenger trains ceased in January 1983 as roads in the rugged and isolated northern Taranaki were improved and passengers switched to cars, though the line was not closed to all passenger trains until January 2007, after an excursion to Whangamomona's "Republic Day" celebrations. This terminated the operation of excursions, but efforts are underway to have the line upgraded to a standard where excursions will again be possible. A working party of stakeholders was formed in June 2007 to investigate the current state of the line and to develop a case for upgrading it. Considerable deferred maintenance is required to bring the line up to safety standards required for passenger trains; this will cost approximately NZ$6 million to complete, according to Stratford Mayor Brian Jeffares.
Most freight was for the rural hinterland, but along the SOL there were coal mines near Ohura and Tangarakau, and also sawmills. One freight train each way operates each week night, between New Plymouth and Auckland.
The SOL was upgraded in 1959-60, and a deviation and new station built at Stratford.
In conjunction with the Marton - New Plymouth Line the SOL provides a valuable alternative route between Taumarunui and Marton when the North Island Main Trunk is closed.