The C&O Canal Company was chartered in 1825, the same year as the opening of the Erie Canal. The groundbreaking was celebrated by President John Quincy Adams at Little Falls in 1828. The canal was completed to Seneca by 1830, to Rock Creek by 1831, to Harper's Ferry by 1834, and to Cumberland by 1850. Four Aquia Creek sandstone locks were built in Georgetown in 1830 by contractor Dibble, Beaumont & McCordin.
The canal was used as a source of water mill power from 1837 and reached peak tonnage in 1871. The canal included the world's largest boat incline, used for lowering barges to the Potomac River near Georgetown, which was completed in 1876 but destroyed by flood in 1889.
The canal served as the major commercial artery in the Potomac Valley. Along the canal, significant quantities of food, fuel, and building materials were transported to supply the growing national capital. As a result, an adjacent business district was created and expanded, and many of these businesses utilized the canal for water resources.
The C&O Canal ceased commercial operations after a 1924 flood. It was acquired by the Department of the Interior as a historic site in 1938.