City of Portland planners began considering a streetcar system in 1990, in response to recommendations in a Central City Plan the council had adopted in 1988.
The proposed network was originally referred to as the Central City Trolley and was envisioned as using faux-vintage streetcars like those of the Portland Vintage Trolley service.
However, the name was later changed to Central City Streetcar, out of concern by project supporters that the word "trolley" would carry the connotation that the service was only a tourist attraction rather than a form of transportation, and in 1993 the city decided the line would use modern, low-floor cars instead of vintage ones.
In 1995, the city estimated the cost to build a line from Northwest Portland to PSU as $30 million.

Portland Streetcar started with a 4.8 miles (7.7 km) counterclockwise loop of single track that commenced operations on July 20, 2001, running from the Portland State University (PSU) campus, north through the Pearl District, west to NW 23rd Avenue and then back to PSU on adjacent streets.
Most of the $57 million used to build it came from local sources, and only $5 million came from the federal government.

On March 11, 2005, a 0.6-mile (1 km) extension was placed into service at the line's southern end, from PSU to RiverPlace.
This was the first phase of a plan to serve Portland's South Waterfront redevelopment area, including a new outpost of Oregon Health & Science University.
This section includes a short length of two-way single-track operation, which at the time was about 100 yards (91 m) long and ran along Montgomery Street and 4th Avenue. (
The 4th Avenue section was doubled in 2014.)
Streetcar-only signals ensure that only one direction is in use at one time.
The extension cost $18.1 million, including the purchase of two additional streetcars, with the intent to allow streetcars to run every 10 minutes.
In 2005 the Portland Streetcar project was awarded the Rudy Bruner Award for Urban Excellence gold medal.

Another extension of 0.42 mi (0.68 km) south to the lower terminus of the Portland Aerial Tram at SW Gibbs Street, in the South Waterfront District, opened on October 20, 2006.
For the next five years, that section of track differed from the rest of the line in that the streetcar track ran entirely in its own right-of-way (formerly used by the Willamette Shore Trolley).
It was also bi-directional single track.
This configuration was always planned to be temporary, awaiting an expected rebuilding of Moody Avenue, and in November 2011 the streetcar line began using new double track on a realigned section of Moody.
This change left the short section of bi-directional single track around 4th and Montgomery as the only such running on the current PS system.
At the streetcar's Gibbs Street stop, a new pedestrian bridge opened in summer 2012, linking the stop to the Lair Hill neighborhood that was otherwise cut off by Interstate 5.

On August 17, 2007, the route was extended south of Gibbs Street, to SW Lowell and Bond, serving more of the South Waterfront district.
This 0.46-mile (0.74 km) extension is a 10-block loop, from SW Moody and Gibbs proceeding south on Moody Avenue, east on Lowell Street and north on Bond Avenue to OHSU Commons at Gibbs, which stop is also directly adjacent to the entrance to the aerial tram.

By 2008, Portland estimated the streetcar prompted the construction of more than 10,000 new housing units and 5,400,000 square feet (500,000 m²) of institutional, office, and retail and construction within two blocks.

During 2010, Portland Streetcar had a weekday average of 11,900 riders.
In August 2012, it was reported by one source as "about 10,000", but ridership varies by season – for example, being higher when Portland State University is in session – and the daily-ridership figure averaged over a 12-month period through summer 2012, the last 12-month period before the second line opened, was 11,200.

On September 1, 2012, TriMet discontinued the Free Rail Zone (better known by its pre-2010 name, Fareless Square), which had previously allow
City of Portland planners began considering a streetcar system in 1990, in response to recommendations in a Central City Plan the council had adopted in 1988. The proposed network was originally referred to as the Central City Trolley and was envisioned as using faux-vintage streetcars like those of the Portland Vintage Trolley service. However, the name was later changed to Central City Streetcar, out of concern by project supporters that the word "trolley" would carry the connotation that the service was only a tourist attraction rather than a form of transportation, and in 1993 the city decided the line would use modern, low-floor cars instead of vintage ones. In 1995, the city estimated the cost to build a line from Northwest Portland to PSU as $30 million.
Portland Streetcar started with a 4.8 miles (7.7 km) counterclockwise loop of single track that commenced operations on July 20, 2001, running from the Portland State University (PSU) campus, north through the Pearl District, west to NW 23rd Avenue and then back to PSU on adjacent streets. Most of the $57 million used to build it came from local sources, and only $5 million came from the federal government.
On March 11, 2005, a 0.6-mile (1 km) extension was placed into service at the line's southern end, from PSU to RiverPlace. This was the first phase of a plan to serve Portland's South Waterfront redevelopment area, including a new outpost of Oregon Health & Science University. This section includes a short length of two-way single-track operation, which at the time was about 100 yards (91 m) long and ran along Montgomery Street and 4th Avenue. (The 4th Avenue section was doubled in 2014.) Streetcar-only signals ensure that only one direction is in use at one time. The extension cost $18.1 million, including the purchase of two additional streetcars, with the intent to allow streetcars to run every 10 minutes. In 2005 the Portland Streetcar project was awarded the Rudy Bruner Award for Urban Excellence gold medal.
Another extension of 0.42 mi (0.68 km) south to the lower terminus of the Portland Aerial Tram at SW Gibbs Street, in the South Waterfront District, opened on October 20, 2006. For the next five years, that section of track differed from the rest of the line in that the streetcar track ran entirely in its own right-of-way (formerly used by the Willamette Shore Trolley). It was also bi-directional single track. This configuration was always planned to be temporary, awaiting an expected rebuilding of Moody Avenue, and in November 2011 the streetcar line began using new double track on a realigned section of Moody. This change left the short section of bi-directional single track around 4th and Montgomery as the only such running on the current PS system. At the streetcar's Gibbs Street stop, a new pedestrian bridge opened in summer 2012, linking the stop to the Lair Hill neighborhood that was otherwise cut off by Interstate 5.
On August 17, 2007, the route was extended south of Gibbs Street, to SW Lowell and Bond, serving more of the South Waterfront district. This 0.46-mile (0.74 km) extension is a 10-block loop, from SW Moody and Gibbs proceeding south on Moody Avenue, east on Lowell Street and north on Bond Avenue to OHSU Commons at Gibbs, which stop is also directly adjacent to the entrance to the aerial tram.
By 2008, Portland estimated the streetcar prompted the construction of more than 10,000 new housing units and 5,400,000 square feet (500,000 m²) of institutional, office, and retail and construction within two blocks.
During 2010, Portland Streetcar had a weekday average of 11,900 riders. In August 2012, it was reported by one source as "about 10,000", but ridership varies by season – for example, being higher when Portland State University is in session – and the daily-ridership figure averaged over a 12-month period through summer 2012, the last 12-month period before the second line opened, was 11,200.
On September 1, 2012, TriMet discontinued the Free Rail Zone (better known by its pre-2010 name, Fareless Square), which had previously allow
Portland Streetcar