In the early 1890's the towns and villages in the Cembra Valley of Süd Tirol campaigned for a railway link from Predazzo westwards to the Brennero Railway at Ora (Aura), south of Bozen. An alternative plan, with a railway running south-west down the valley of the River Cembra to connect with the line at Lavis, north of Trento, was rejected, even though it would have been near the junction with the Ferrovia Treno-Malé at Mezzocorona, the local population instead preferring a north-facing connection with the rest of Austria.

The railway would have encountered fearsome gradients, and would have been uneconomic – until the advent of the First World War, when the coal producing area assumed great importance. The plan to drive a railway up the mountainside from Ora in the Adige Valley, then over the watershed into the Fiemme Valley, and thence into the Cembra Valley and Predazzo was resurrected, and a construction base was built at the south end of Ora station. During the early winter of 1915, a large number of Russian Prisoners of War were put to work, building the route. A series of five"hairpin" bends were constructed out of the valley floor at Ora, to the village of Montagna., crossing six stone viaducts and through five tunnels as it did so. From there the line used a side valley to gain more height via two more hairpin bends, before heading eastwards to Olmi. The route following the valley south-east through Kaltenbrunn and the summit at San Lugano (1097m) and the Aguai Pass, descending into the Cembra Valley at Carano. The towns in the valley floor were served by the railway – Cavalese, Tesero, Panchia and Fiemme (where the line crossed the river on a spectacular large girder bridge over the River Avisio near Masi di Cavalese). Bearing north-east, the line terminated at the town of Predazzo (1018m).

The line was laid to the "standard" Austrian narrow gauge of 760mm, although the trackbed, tunnels and bridges were constructed for metre gauge traffic. The works were basic, with no ornamentation – even the tunnels were hewn from the rock, but left without portals.

The line was opened to traffic from the main line as far as Ziano de Fiemme on 16 March 1917. However, by this time the Italian Army had advanced to within gun range of the route, and the surveyor, Ing. Orley, had to alter the route to avoid the Italian heavy artillery. The new route was opened in February 1918 to a temporary terminus at Predazzo Süd – by which time the Italian Army had retreated, and the area was free from fighting. It was several months before the second girder bridge over the Avisio was finished and the line laid into Predazzo. The total length of the line was 50.7 km., from the junction at Ora to the terminus at Predazzo. At both ends of the line, turning triangles were provided, to make the job of firing and driving the locomotives easier, and to even out tyre wear on the bends, some of which were more-than 180-degree curves of 60 metre radius. A third turning triangle was provided at the main intermediate station of Castello.

The Austrian General Army Staff specified that the railway should be able to move a brigade of men and equipment from end-to-end within 24 hours, and this dictated the size of the locomotives which were bought. However, the line had been constructed with light rails, which constrained the axle weight. The locos chosen were 2-6-0 + 0-6-0 double expansion Mallet locomotives from Henschel and Sohn, of Kassel in Germany. Part of a total order of forty-six, the ten 550 hp engines were equal to the task of pulling long and heavy freight trains up the ramps.

A smaller locomotive, "Arc" from the Ferrovia Mori-Arco-Riva was loaned to the line during the War, but was returned after the secession of hostilities. Over 100 wagons, from various other railways in the Austro-Hungarian Empire, were brought for use on the line. An journey down the length of the line took on average 3 hours.

At the end of World War 1 the whole Trentino area was annexed by Italy, and the line came under the auspices of the Italian State Railways, Ferrovia Stella, who maintained the services with the existing locos and trains.

In 1928 FS decided to re-gauge the line to metre gauge and to electrify it. The conversion was carried out by a nominally-independent company, Ferrovia Elettrica Val di Fiemme (FEVF), who electrified the line at 2600 v DC, and bought three electric railcars for passenger traffic, three trailers, and two electric locomotives from the Italian firm of Carminati e Toselli (who also supplied much of the electrical equipment). The new electric trains, and the widening of the gauge, allowed much faster services to be operated, bringing down the travel time to just over two hours between the ends of the line. More trailers were built, using the underframes of bogie wagons constructed for the line opening.

Despite electrification, much of the goods traffic remained in the hands of the Mallets, two of which were re-gauged and continued to operate for another thirty years. The remaining locos were sold to Ferrovie Meridionali Sarde (FMS) who operated some services on Sardinia. The engines were used on heavy coal trains from the Sulcis coal mines to the ports until 1960.

The line suffered war damage in 1941-1944, and in the rush to the motor car, the line was closed on and from 10 January 1963. The electric cars and trailers were sold to the Ferrovia Genova – Casella, and some are still employed on this now-tourist route on nostalgia trains. The Mallet locos were broken up in the area.

The girder bridges over the Avisio still exist today, the larger one near Masi di Cavalese still with the two 39 metre-long girder sections intact. Nearer Ora, a curved stone viaduct crossing the Inferior Gleno River still makes a commanding sight, standing out from the mountainside. The 73 metre-long viaduct has five arches, each twelve metres, wide, and with a maximum height of 22.6 metres. A proposal exists to relay the 10 km between Doladizza and San Lugano as a tourist railway using steam traction. The station buildings at the extremities of this section are still in situ, complete with name signs, and the trackbed is clear between the two points.