The Transcontinental Railway of 1865 transformed the businesses of the Bear once again. Construction towns were built along its route: Camp 20 became Colfax, another camp became Alta. After construction, supply stations dotted the route to supply fuels; the Bear watershed provided much of the oak that was burned in the early steam locomotives.
The railroad connected the new farms to markets in the East, using high Sierra ice to pack fruit for shipping.
The Bear watershed hosted more railroads than just the transcontinental line. The Nevada County narrow gauge linked Grass Valley and Nevada City with the Southern Pacific in Colfax, via the high trestle over the Bear River (picture at right), one of the engineering accomplishments of the era.
Lesser known were the logging railroads built to carry Bear River timber harvest to mills and then to markets. The Towle Bros. Lumber Company, located in the town of Towle along the transcontinental rails near Dutch Flat, had thirty miles of logging railroads in the Bear watershed area. These rails first carried logs to rough saw mills, then carried the rough lumber to the finishing mill where sashes and doors were sent east and west to markets to San Francisco and as far as the Midwest.