In the early 1860s, the United States Congress approved a project to construct the first coast-to-coast railroad. Part of the Pacific Railroad Act of 1862 specified a maximum grade, or slope, of 2% for the rail line. Prior to the laying of any metal rail, the rail bed itself had to be cut through hills and lifted with fill material when necessary in order to maintain a gentle slope. The work of grading could go on independently of the laying of the rail and Congress permitted crews of the two competing rail companies to construct grades as much as 300 miles in advance of the current ends of the track. When the two companies passed each other by as much as 200 miles without meeting, Congress stepped in and dictated where the meeting of the two lines would occur: Promontory, Utah.

Through the 1860s, labor shortages due to the Civil War in the east and gold rushes in the west slowed construction of the rail. The Union Pacific railroad company, working east-to-west, hired many Irish immigrants to help with the construction. The Central Pacific railroad company, working west-to-east, hired some 10,000 Chinese laborers at $30 per month to help build the railroad. The "Chinese Arch", a natural rock formation near the completion of the line, was most likely named in recognition of the Chinese laborers.