The Caro Northern Railway Company was chartered on September 14, 1906, to connect Caro in Nacogdoches County with Mount Enterprise in Rusk County. The railroad originated as a logging road; it was chartered as a common carrier in 1906 with capital stock of $100,000. The principal place of business was Caro. The first board of directors included C. H. Morris and M. W. Jones, both of Winnsboro; Mrs. M. R. Schulter of Dallas; W. T. Whiteman and E. M. Decker, both of Caro; D. W. March of Mount Enterprise; and R. H. Thompson of Henderson. The Caro Northern was recognized by the Railroad Commission as a common carrier on March 25, 1907. In 1916 the line owned one locomotive and two cars and reported passenger earnings of $1,400 and freight earnings of $15,000. During 1919 the company was operated by a receiver appointed at the direction of the commission due to the failure of the railroad to operate as required by law. According to the Railroad Commission, the company did not operate in 1922 and was abandoned in 1923. However, by 1926 the Caro Northern had resumed service. In that year it was considered a Class III railroad with passenger earnings of $1,300 and freight revenues of $13,000. The railroad was abandoned in 1928.