As the Baltimore & Ohio Railroad was being completed to Wheeling, Parkersburg supporters continued to push for a connection to their city. In 1851, the Virginia legislature approved the charter for a railroad to run from the B&O main line near the mouth of Three Fork Creek in Taylor County to Parkersburg. This junction point generated the new town of Grafton. To protect the original main line the charter specified that the new line, the Northwestern Virginia Railroad, was not to be operated until one year after the completion of the original line to Wheeling.

The Northwestern Virginia Railroad was financed almost entirely by B&O interests. The B&O itself contributed at least $1 million, and the city of Baltimore added another $1.5 million. About $500,000 of stock was sold, primarily to citizens in northwestern Virginia. Benjamin Latrobe, a well-known early railroad civil engineer, was made chief engineer for the new railroad and quickly completed a survey of the route. Thomas Swann, who had retired as president of the B&O, returned from a European vacation and became president of the new line. Although the 104-mile route was less rugged than the original main line to Wheeling, construction was not rapid. The Northwestern Virginia Railroad did not begin operation until May 1, 1857.

In December 1856, the B&O leased the Northwestern Virginia Railroad for five years. Efforts by the State of Virginia to purchase control of the Northwestern Virginia were forestalled when the B&O purchased most of the bonds of the new railroad before Virginia could act. Many leaders in northwestern Virginia saw their economic future tied more clearly to Baltimore than to Richmond and Norfolk, later a factor in the creation of West Virginia.

Construction costs of the Northwestern Virginia Railroad were higher than anticipated, and the railroad was a financial disappointment until the Civil War. Since the line was a key link to Cincinnati and St. Louis, however, the B&O reorganized the Northwestern by assuming the first mortgage from the City of Baltimore and by rebuilding the railroad. As part of this reorganization the B&O absorbed the Northwestern Virginia Railroad, and after January 1, 1865, it became known as the Parkersburg Branch.