George Stephenson, the son of a colliery fireman, was born at Wylam, eight miles from Newcastle-upon-Tyne, on 9th June, 1781. The cottage where the Stephenson family lived was next to the Wylam Wagonway, and George grew up with a keen interest in machines. George's first employment was herding cows but when he was fourteen he joined his father at the Dewley Colliery. George was an ambitious boy and at the age of eighteen he began attending evening classes where he learnt to read and write. In 1802 Stephenson became a colliery engineman and later that year he married Frances Henderson, a servant at a local farm. To earn extra money, in the evenings, he repaired clocks and watches. On 16th October, 1803, his only son, Robert was born. Frances suffered from poor health and she died of consumption in 1806. When he was twenty-seven, Stephenson found employment as an engineman at Killingworth Colliery. Every Saturday he took the engines to pieces in order to understand how they were constructed. This included machines made by Thomas Newcomen and James Watt. By 1812 Stephenson's knowledge of engines resulted in him being employed as the colliery's engine-wright.

Working at a colliery, George Stephenson was fully aware of the large number of accidents caused by explosive gases. In his spare time Stephenson began work on a safety lamp for miners. By 1815 he had developed a lamp that did not cause explosions even in parts of the pit that were full of inflammable gases. Unknown to Stephenson, Humphry Davy was busy producing his own safety lamp. In 1813 Stephenson became aware of attempts by William Hedley and Timothy Hackworth, at Wylam Colliery, to develop a locomotive. Stephenson successfully convinced his colliery manager, Nicholas Wood, to allow him to try to produce a steam-powered machine. By 1814 he had constructed a locomotive that could pull thirty tons up a hill at 4 mph.

Stephenson called his locomotive, the Blutcher (pictured right), and like other machines made at this time, it had two vertical cylinders let into the boiler, from the pistons of which rods drove the gears. Where Stephenson's locomotive differed from those produced by John Blenkinsop, William Hedley and Timothy Hackworth, was that the gears did not drive the rack pinions but the flanged wheels. The Blutcher was the first successful flanged-wheel adhesion locomotive. Stephenson continued to try and improve his locomotive and in 1815 he changed the design so that the connecting rods drove the wheels directly. These wheels were coupled together by a chain. Over the next five years Stephenson built sixteen engines at Killingworth. Most of these were used locally but some were produced for the Duke of Portland's wagon way from Kilmarnock to Troon. The owners of the colliery were impressed with Stephenson's achievements and in 1819 he was given the task of building a eight mile railroad from Hetton to the River Wear at Sunderland.

Stephenson arranged a meeting with Pease and suggested that he should consider building a locomotive railway. Stephenson told Pease that "a horse on an iron road would draw ten tons for one ton on a common road". Stephenson added that the Blutcher locomotive that he had built at Killingworth was "worth fifty horses". That summer Edward Pease took up Stephenson's invitation to visit Killingworth Colliery. When Pease saw the Blutcher at work he realised George Stephenson was right and offered him the post as the chief engineer of the Stockton & Darlington company. It was now now necessary for Pease to apply for a further Act of Parliament. This time a clause was added that stated that Parliament gave permission for the company "to make and erect locomotive or moveable engines". Stephenson began working with William Losh, who owned an ironworks in Newcastle. Together they patented their own make of cast iron rails. In 1821 John Birkinshaw, an engineer at Bedlington Ironworks, developed a new method of rolling wrought iron rails in fifteen feet lengths. Stephenson went to see these malleable rails and decided they were better than those that he was making with Losh. Although it cost him a considerable amount of money, Stephenson decided to use Birkinshaw's rails, rather than those he made with Losh, on the Stockton & Darlington line. In 1823 Edward Pease joined with Michael Longdridge, George Stephenson and his son Robert Stephenson, to form a company to make the locomotives. The Robert Stephenson & Company, at Forth Street, Newcastle-upon-Tyne, became the world's first locomotive builder. Stephenson recruited Timothy Hackworth, one of the engineers who had helped William Hedley to produce Puffing Billy, to work for the company. The first railway locomotive, Locomotion, was finished in September 1825. The locomotive was similar to those that Stephenson had produced at the collieries at Killingworth and Heaton. Work on the track began in 1822. George Stephenson used malleable iron rails carried on cast iron chairs. These rails were laid on wooden blocks for 12 miles between Stockton and Darlington. The 15 mile track from the collieries and Darlington were laid on stone blocks. While building this railway George Stephenson discovered that on a smooth, level track, a traction force of ten pounds would move a ton of weight. However, when there was a gradient of 1 in 200, the hauling power of a locomotive was reduced by 50 per cent. Stephenson came to the conclusion that railways must be specially designed with the object of avoiding as much as possible changes in gradient. This meant that considerable time had to be spent on cuttings, tunnels and embankments. The Stockton & Darlington line was opened on 27th September, 1825. The Stockton & Darlington line successfully reduced the cost of transporting coal and in 1826 Stephenson was appointed engineer and provider of locomotives for the Bolton & Leigh railway.