The North Eastern Railway Company was formed in 1854 by the amalgamation of the York, Newcastle & Berwick Railway, the York & North Midland Railway, the Leeds Northern Railway. These 3 Companies had developed from Companies dating back to the 1830's and 1840's. The York, Newcastle and Berwick was an amalgamation of lines forming a through route from York to Berwick. the York & North Midland Railway provided the route from York to London(Euston Square), while the Leeds Northern started life as as the Leeds and Thirsk Railway, opened in 1849 and renamed in the same year, when it envisaged extending north-eastwards. The NER eventually had the monopoly of rail traffic in north-east England from Hull to Berwick.

Through its formation it acquired a mixed collection of locomotives from its constituent companies and for many years new engines were turned out, without consideration as to standardisation, by the locomotive works at Darlington, Gateshead, Shildon and York. It was not until 1885, under the direction of the new Locomotive Superintendant, Thomas W. Worsdell, that serious efforts were made towards standardisation. Worsdell also simplified the external appearance of the locomotives which he provided with an impressive brass safety-valve casing which soon became. the hallmark of North Eastern locomotives.

The Gateshead Works dated back to the 1840’s and became the locomotive headquarters in 1854. By 1910 space at Gateshead was at a premium and new headquarters were built at Darlington.The Darlington Works were originally opened by the Stockton & Darlington Railway Company in 1863, the same year in which the company was amalgamated with the NER. The Darlington works were expanded in 1884, 1903 and 1910. The majority of the NER locomotives were built at the Darlington works.

The responsibility for the design of the locomotives, if not the details, was the Locomotive Superintendant, later known as Chief Mechanical Engineer. The first of these, was T.W. Worsdell who was born in 1838. He worked at Crewe where he became Works Manager in 1871 after a spell of five years with the Pennsylvania Railroad. He joined the Great Eastern Railway in 1881 where he experimented with compounding. In 1885 he became Locomotive Superintendant of the North Eastern Railway and produced about a dozen new classes which set the standard for North Eastern locomotive design for the next thirty years.

Wilson Worsdell succeeded his brother, T.W. Worsdell, in 1890. He was born at Crewe and he too went to the Pennsylvania Railroad but joined the London & North Western Railway on his return to this country. During his time with the North Eastern he brought out about two dozen new locomotive designs.

Vincent L. Raven (later Sir) followed as Chief Mechanical Engineer, in 1910, but was distinguished more for his administrative abilities than his locomotive designs. His innovations on the NER included locomotive cab Signalling and the widespread use of superheating. Of his locomotives the class Z was said to be one of the best types of passenger locomotives in the country.

Under an agreement dated 1862 the NER ran East Coast Expresses over the North British line between Berwick and Edinburgh and so transport between London and Edinburgh was shared between the Great Northern and the North Eastern.

In 1921 there were 120 independent railway companies in existence and as a result of the Railway Act of that year they were merged into four large Companies; GWR, LMS, LNER and SR. The groupings took effect from 1st January 1923 with the NER being merged into the LNER.