In 1890 Sir George Newnes, MP, publisher and builder of the Lynton funicular railway, offered to build a cliff railway to connect Babbacombe Downs to Oddicombe Beach but died before the project could be realised.

Thirty years later George Croydon Marks, an English engineer, patent agent and Liberal, noted by many as a disciple of Isambard Kingdom Brunel, began consultation with The Torquay Corporation and in 1923 the Torquay Tramways Company announced that it was to install a lift from Babbacombe Downs to Oddicombe Beach. Work started in December 1924 and the Babbacombe Cliff Railway was completed in 1926 at a cost of £15,648.

On April 1st 1926 the then Mayor of Torquay, Alderman John Taylor, made the first trip. His ticket, number A000, was framed in silver by Mr H Thomas, the lessee of Oddicombe Beach and presented to the Mayor.

The Torquay Tramway Company company worked the line until the 13th March 1935 when it was taken over by Torquay Corporation for the sum of £18,000. Early returns showed that 192,000 people used the lift that year.

In 1941, the line was closed and the beach sealed off due to wartime restrictions  The line did not reopen until 29th June 1951 after refurbishment by J & E Hall of Dartford, at a cost of some £10,000.

In 1993 the railway was closed for track replacement, re-opening in 1995.

 The cars and track were replaced in the winter of 2005/6 and the control gear and doors in 2006/7. Passengers now travel in new carriages painted in the original maroon and cream colours with Torbay’s coat of arms on either side of the centre panels.

In July 2009, the ownership of the line was transferred from Torbay Council, which had inherited Torquay Borough Council as a result of local government organisation, to a specially created community interest company. In 2019 the CIC was converted to a Charitable Incorporated Company which now runs the railway.