The first streetcars in Salem were horsecars that began running between the downtown business district and the train depot on January 15, 1889. Later that year, the Salem Street Railway stretched five miles, with extensions to the fairgrounds and East School. During 1889-1891, future U.S. President Herbert Hoover—who lived with his uncle, Dr. Henry Minthorn, a railway company executive—worked as a part-time streetcar conductor while taking classes at Capital Business College.

On May 27, 1890, the new Capital City Railway Company introduced electric streetcars to Salem and operated new lines to the State Penitentiary and the Rural Cemetery. The Salem Street Railway, reorganized as the Salem Motor Railway, also promised to electrify. 

By 1899, trolleys were running north to Garden Road, east to the Asylum, and south to Yew Park and Salem Heights. These destinations were two to three miles from downtown. 

The financial panic of 1893 brought receivership and consolidation to Salem transportation companies. In 1901, all lines, totaling 13.8 miles, merged into the Salem Light, Power and Traction Company. 

New owners followed in quick succession. On June 11, 1904, Denver interests incorporated the Citizen’s Light and Traction Company; and in June 1906, Salem’s street railways became part of the Portland Railway Light and Power Company. On May 5, 1912, the Southern Pacific Railroad added the Salem system to its electrified Willamette Valley network.

An attempt to reinvigorate Salem transit through the addition of four modern Birney trolleys in 1920 was not enough to overcome thirty years of losses. Streetcar service was discontinued on August 4, 1927.