In the 19th century the first railwaylocomotives were powered by steam, usually generated by burningcoal. Because steam locomotives included one or more steam engines,they are sometimes referred to as "steam engines". The steamlocomotive remained by far the most common type of locomotive untilafter World War II. In the USA, Mathias Baldwin started buildingstationary steam engines for commercial use and by 1830, opened hisown workshop producing steam locmotives. Baldwin Locomotive Worksbecame the world's largest by the early 1900s and built the mostpowerful steam locos in history, the 2884 "Yellowstone" for theDuluth, Missabe and Iron Range Railroad. The first steam locomotivewas built by Richard Trevithick; it first ran on 21 February 1804,although it was some years before steam locomotive design becameeconomically practical. The first commercial use of a steamlocomotive was Salamanca on the narrow gauge Middleton Railway inLeeds in 1812. The locomotive Fairy Queen, built in 1855 runsbetween Delhi and Alwar in India and is the oldest steam locomotivein regular (albeit tourist-only) service in the world, and theoldest steam locomotive operating on a mainline.

The all-time speed record for steam trains is held by an LNER ClassA4 4-6-2 Pacific locomotive of the LNER in the United Kingdom,number 4468 Mallard, which pulling six carriages (plus adynamometer car) reached 126 mph (203 km/h) on a slight downhillgradient down Stoke Bank on 3 July 1938. Aerodynamic passengerlocomotives in Germany attained speeds very close to this and dueto the difficulties of adequately balancing and lubricating therunning gear, this is generally thought to be close to thepracticable limit for a direct-coupled steam locomotive.

Before the middle of the 20th century, electric and diesel-electriclocomotives began replacing steam locomotives. Steam locomotivesare less efficient than their more modern diesel and electriccounterparts and require much greater manpower to operate andservice. British Rail figures showed the cost of crewing andfuelling a steam locomotive was some two and a half times that ofdiesel power, and the daily mileage achievable was far lower. Aslabour costs rose, particularly after the second world war,non-steam technologies became much more cost-efficient.[citationneeded] By the end of the 1960s–1970s, most western countries hadcompletely replaced steam locomotives in passenger service. Freightlocomotives generally were replaced later. Other designs, such aslocomotives powered by gas turbines, have been experimented with,but have seen little use, mainly due to high fuel costs.

By the end of the 20th century, almost the only steam power stillin regular use in North America and Western European countries wason heritage railways largely aimed at tourists and/or railroadhobbyists, known as 'railfans' or 'railway enthusiasts', althoughsome narrow gauge lines in Germany which form part of the publictransport system, running to all-year-round timetables retain steamfor all or part of their motive power. Steam locomotives remainedin commercial use in parts of Mexico into the late 1970s. Steamlocomotives were in regular use until 2004 in the People's Republicof China, where coal is a much more abundant resource thanpetroleum for diesel fuel. India switched over from steam-poweredtrains to electric and diesel-powered trains in the 1980s, exceptheritage trains. In some mountainous and high altitude rail lines,steam engines remain in use because they are less affected byreduced air pressure than diesel engines.[citation needed] Steamlocomotives remained in routine passenger use in South Africa untilthe late 1990s, but are now reserved to tourist trains. In Zimbabwesteam locomotives are still used on shunting duties around Bulawayoand on some regular freight services.

As of 2006 DLM AG (Switzerland) continues to manufacture new steamlocomotives.