The Pecos and Northern Texas Railway Company was chartered on March 19, 1898, by James J. Hagerman and associates to build from Amarillo through Canyon, Umbarger, Hereford, Friona, and Bovina to the Texas-New Mexico line at Farwell and Texico, a distance of ninety-five miles. The capital was $100,000, and the business office was in Amarillo. Members of the first board of directors included Percy Hagerman from Colorado Springs, Colorado; W. F. Dunning from New York; A. C. Campbell from Eddy, New Mexico; and I. H. Madden, W. H. Fuga, R. L. Stringfellow, and Benjamin T. Ware, all from Amarillo. The P&NT opened on March 1, 1899, to the Texas-New Mexico border, where connection was made with the Pecos Valley and Northeastern Railway which, together with other affiliated companies, formed a line from Amarillo to Pecos through eastern New Mexico. In 1901 the P&NT and affiliated lines were acquired by the Atchison, Topeka and Santa Fe Railway Company. Beginning in 1906, the Santa Fe used the P&NT charter, as amended, to construct 475 additional miles of railroad covering the Panhandle and South Plains regions of Texas. On February 27, 1907, fifty-seven miles between Canyon and Plainview was opened. This line was extended forty-six miles to Lubbock on January 9, 1910, and to Coleman via Sweetwater, 200 miles, on December 1, 1911. At Coleman connection was made with the Gulf, Colorado and Santa Fe Railway, thus forming a through Santa Fe route from the Texas Gulf Coast to the Panhandle and the Pacific Coast. During this period the P&NT also built a fifty-four-mile branch from Slaton Junction to Lamesa that opened on October 1, 1910, and a twenty-seven-mile line from Plainview to Floydada that opened on May 1, 1910. Finally, on March 1, 1914, the P&NT completed an eighty-eight-mile line between Farwell and Lubbock Junction that formed a shorter route for traffic between the Gulf Coast and California. This construction gave the P&NT 570 miles of main track.
Construction of the line between Plainview and Floydada was begun by the Llano Estacado Railway Company, which completed the grading and placing of culverts. The P&NT purchased the graded roadbed in March 1910 and completed the line under its own charter. Another company, the Gulf, Santa Fe and Northwestern Railway Company, was chartered to build between Farwell and Lubbock, but it was subsequently decided to build the line under the P&NT charter. The GSF&N was merged with the P&NT on April 23, 1906. The P&NT received cash donations of $200,000 between 1901 and 1915 from communities or large landowners. Charles W. Post, for instance, gave $50,000 for the extension of the line through Garza County, and the Western Union Land Company gave $40,000 from proceeds of the sale of lots in Hereford in Deaf Smith County. On July 1, 1914, the 486 miles of the P&NT west of Sweetwater was leased to the Panhandle and Santa Fe Railway, with the eighty-four miles between Sweetwater and Coleman leased to the Gulf, Colorado and Santa Fe. The P&NT was operated under lease until December 1948, when it was merged into the P&SF.