The line ran north from a junction with the original Signal Mountain line, very near the intersection of Moccasin Bend Road and Elmwood Drive, through Red Bank (roughly paralleling Dayton Boulevard), until at Harding Road it branched off to the northeast, passing through Lupton City and eventually connecting to the CNO&TP mainline just north of Tenbridge (the railroad's name for the bridge crossing the Tennessee River below the Chickamauga Dam).
Construction on the line began in November 1915, and operations on the line began in July of 1916. However, the Company was unable to acquire the copper wire necessary to permit operation of the electric streetcars and consequently the route was operated for freight service only. A short time later, in early 1917, the part of the route from the junction with the CNO&TP Railway to Harding Road was sold to the CNO&TP so that the Traction Company could avoid coming under the jurisdiction of the Interstate Commerce Commission.
At the same time, the copper wires needed had been acquired and were quickly installed, with passenger service commencing in March of 1917. However, the line would only receive about a decade of passenger service before the state was petitioned by the Company to discontinue passenger service in 1927, claiming that the line was continuously losing money. While the state originally granted the company's request, it was subsequently reversed, with the result that when streetcar service was temporarily restored, passengers had to transfer cars at the junction with the Signal Mountain line and only the Signal Mountain route continued to operate into the downtown area. Eventually, the community agreed to a plan that would replace the streetcars with buses, and at the end of March 1928 passenger service along the Dry Valley line ended.