Services started around 21 June 1882, a few days in advance of the arrival of the formal permission from the Board of Trade on 28 June 1882. Two tram engines were obtained from Kitson and Company.
The tramway went into liquidation in 1897 and was purchased for £2,100 (equivalent to £301,000 in 2023)[2] by the Belfast and Northern Counties Railway. They invested in the tramway providing some additional passenger vehicles and a new steam tramway engine. A new depot was constructed in Portstewart by the railway engineer Berkeley Deane Wise in 1899, at the southern end of the promenade, opposite the Town Hall.[3]