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The earliest toy trains were made from lead and had no moving parts. Some had wheels which flipped, but these had to be pulled or pushed. Some of the early 19th-century push toy rails were made of tinplate, such as the big, durable, stylized locomotive toys in the U.S., that were painted red and gold and decorated with hearts and flowers. model trains shops

Around 1875, technological advancements in materials and manufacturing allowed tin to be stamped, cut, rolled, and lithographed faster than previously.
Toy trains were altered when Märklin, a German company that specialized in doll house accessories, sought to make an equal toy for boys where a continuous revenue stream could be ensured by purchasing add-on accessories for decades after the initial purchase. Along with boxed sets comprising a train and monitor, Märklin offered extra track, rolling stock, and buildings sold separately, creating the predecessor to the modern model train layout featuring buildings and scenery in addition to a working train.

Electric trains followed, with the first appearing in 1897, made by the U.S. firm Carlisle & Finch. As home use of power became more common in the early 20th century, electric trains gained popularity and as time moved on, these electric trains grew in sophistication, gaining light, the ability to change direction, to emit a whistling noise, to smoke, to couple and uncouple cars as well as load and unload freight. Toy trains by the first half of the 20th century were often made of lithographed tin; afterwards trains were frequently made mainly of plastic.
Before the 1950s, there was little differentiation between toy trains and model railroads–model railroads were toys by definition. Pull toys and wind-up trains were marketed by children, while electric trains were marketed towards teenagers, especially teenaged boys.

Now, S gauge and O gauge railroads continue to be considered toy trains even by their own adherents and are often accessorized with semi-scale model buildings by Plasticville or K-Line (who owns the rights to the Plasticville-like buildings created by Marx from the 1950s into the 1970s). However, as a result of their high cost, one is more inclined to locate an HO scale or N scale train set in a toy shop than an O scale collection.

Many modern electric toy trains contain sophisticated electronic equipment which emit digitized sound effects and permit the operator to safely and easily run multiple remote control trains on one loop of course. In the last few decades, many toy rail operators may operate a train using a TV camera at the front of the motor and hooked up to a screen, such as pc monitor. This will show an image, similar to that of a genuine (smaller size) railroad.

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