The Rio Grande City Railway Company was planned as a war measure by the federal government to reach Fort Ringgold on the Rio Grande during the Mexican border troubles in 1916. Material was assembled near Sam Fordyce, but the troubles ended before the extension was made. On February 7, 1924, the railroad was finally chartered. The line was planned to run between Sam Fordyce in Hidalgo County to Rio Grande City in Starr County. The charter for the RGC indicated a capital stock of $22,000, and its principal place of business was San Antonio. Members of the first board of directors were Albert Steves, Franz C. Groos, John B. Carrington, John H. Cunningham, S. B. Ricaby, Percy Tyrrell, J. H. Savage, Wallace Cunningham, Jr., Frank A. Winerich, and H. Lee Ransom.
In 1925 eighteen miles of track was laid between Sam Fordyce and Rio Grande City. Control of the company passed to the New Orleans, Texas and Mexico on January 2, 1926, but the RGC continued to be operated as a separate railroad. Though most of its earnings came from freight operations, passenger service was also provided. In 1926 the line reported passenger receipts of $4,500, freight receipts of $40,700, and other receipts of more than $1,100. In that year the railroad owned one locomotive, one freight car, and one caboose. In 1952 it reported no passenger income, freight income of $120,000, and other income of $10,000. All rolling stock was leased. The RGC was consolidated with the Missouri Pacific on March 1, 1956. In 1984 the former RGC was included in the tracks sold by the MP to the Border Pacific Railroad Company.