The Londonderry & Lough Swilly Railway Company was set up by an act of parliament in 1853 by the then parliament of Great Britain & Ireland. The first track between Derry and Forland Point was completed in 1863 with a further line to Buncrana in 1864. Further extensions were completed with a branch line from Buncrana to Carndonagh and a line from Derry via Tooban Junction to Letterkenny completed in 1883, this was further extended to Burtonport inn 1895.
In 1929 due to financial difficulties the directors decided to close some of the lines and replace them with buses and road freight. The railway finally closed in 1953 when the Buncrana - Derry line ceased. The company presently operates a cross border bus service between Derry and Buncrana, Letterkenny, Moville and to various towns in Inishowen and north Donegal. In addition the Swilly also operate a school bus service in Donegal under contract to C.I.E. The company also operate a Vehicle Testing Centre at its Bonagee garage in Letterkenny for PSV and commercial vehicles. The company presently employ in excess of 90 people.
The company is the oldest surviving railway company set up in the Victorian era that is still trading as a commercial concern.