This article lists events related to rail transport that occurred in 1886.

• January 25 – The North Hudson County Railway in New Jersey opens the first elevated cable railway in the United States, the Hoboken Elevated.^[1]

• February 1 – The Mersey Railway opened to public traffic between Birkenhead and Liverpool by tunnel beneath the River Mersey, England.^[2]
• February 18 - The Kansas City, Memphis and Birmingham Railroad is incorporated in Mississippi.^[3]

• March–September – Great Southwest Railroad Strike, a labor union strike against the Union Pacific and Missouri Pacific railroads involving more than 200,000 workers.^[4]
• March 30 – Executives from several railroad companies operating in the southern United States meet and agree to all regauge their railroads to standard gauge, 1,435 mm (4 ft 8+1⁄2 in), by June 1.^[5]

• May – The Atchison, Topeka and Santa Fe Railway takes control of the Gulf, Colorado and Santa Fe Railway.

• July 8 – Russian emperor Alexander III establishes Railway Worker Day as a national holiday on the anniversary of the name day of Nikolai I, who first commissioned Russian railroad construction.^[6]

• August 17 – The 7 mile (11.3 km) long Lakeside and Marblehead Railroad is incorporated in Ottawa County, Ohio.

• September 1 – Regular traffic (initially freight only) begins to pass through the Great Western Railway’s Severn Tunnel linking southern Gloucestershire and Monmouthshire.^[7]
• September 9 – The rail connection to Cape Tormentine, New Brunswick, is completed by a predecessor of the New Brunswick and Prince Edward Island Railway.

• October 18 – Between 5:00 AM and 6:00 PM, the St. Louis, Arkansas and Texas Railroad, a predecessor of the St. Louis Southwestern Railway, converts 418 miles (673 km) of track from narrow gauge to standard gauge.

• November 20 – The San Bernardino and Los Angeles Railway is incorporated as an Atchison, Topeka and Santa Fe Railroad subsidiary to build a rail connection between its namesake cities in California.^[8]

• The first refrigerator cars on the Southern Pacific Railroad enter operation.
• The Southern Pacific Railroad wins the landmark Supreme Court case Santa Clara County v. Southern Pacific Railroad which establishes equal rights under the law to corporations.
• Grande Ceinture line around Paris completed.

• May 4 – Henry G. Ivatt, Chief Mechanical Engineer of the London, Midland and Scottish Railway (d. 1976).

• W. Graham Claytor, president of Southern Railway (US) (d. 1971).

• July 24 – Nathaniel Worsdell, English carriage builder (b. 1809).^[9]

• December 28 - William Kimmel, director for Baltimore and Ohio Railroad (b. 1812).

• David Levy Yulee, Florida railroad executive (b. 1810).

• Clowes, J. A.; Railways of Canada Archives (1999), Eastern New Brunswick's Railway History. Retrieved September 8, 2005.
• Morris, J. C., compiler (December 31, 1902), Annual report of the Commissioner of Railroads and Telegraphs; Part II, history of the railroads of Ohio. Retrieved August 16, 2005.
• Rivanna Chapter, National Railway Historical Society (2005), This Month in Railroad History: October. Retrieved October 18, 2005.
• Santa Fe Railroad (1945), Along Your Way, Rand McNally, Chicago, Illinois.