In 1896 the line was extended southwards from Herculaneum in a tunnel to Dingle Station - the line's only underground station, in Park Road. It is now used as a garage. The tunnel portal is one of the few surviving signs of the railway's existence.
A northward extension connected to the Lancashire and Yorkshire Railway's North Mersey Branch. The Lancashire and Yorkshire Railway ran some of its own specially-built vehicles on the line, and these were especially heavily used during race meetings at Aintree Racecourse.
During World War II the railway suffered extensively from bomb damage. As a purely local undertaking, it was not nationalised in 1948 with the rest of the British railway system. In the late 1940s and early 1950s the Company started to modernise some of the carriages (incorporating sliding doors). The line continued to carry large numbers of passengers, especially dock workers.
The railway was carried mainly on iron viaducts, with a corrugated iron decking on which the tracks were laid. As such, it was vulnerable to corrosion - especially as the steam-operated Docks Railway operated beneath some sections of the line. During surveys it was discovered that expensive repairs would be necessary to ensure the line's long term survival. Accordingly, and despite considerable protest, the line closed on December 30 1956 and the Liverpool Overhead Railway Company went into voluntary liquidation. The service was replaced by a bus service operated by Liverpool Corporation. The iron bridges were soon removed for scrap, leaving little trace of the railway.