The State Forest Railway in Pálháza is the oldest of this kind in Hungary.

It is a narrow gauge railway and originally, the trains were drawn by horses up the hill. Its construction was the idea of Count Károlyi István in 1888 between the saw-mill in Pálháza and Kőkapu. The track had a 5-20% descend from Kőkapu to the saw-mill so the empty carriages were drawn by horses up the hill and then the loaded carriages were rolled down the hill to the saw-mill. The carriages only needed braking.

It was in 1956 that carrying passengers was first thought about and to start it the railway was modernized. The tracks were changed and the first C-51 engines were bought. Scheduled passenger traffic was launched in1958.

Because the Hegyközi Narrow Gauge Railway was closed in1980, the traffic of this railway reduced and the forestry decided to have a break and for 9 years the railway was not in use. On 15 August 1989 it was restarted due to social cooperation, the railway and the tunnel were redecorated in 1990, so the train could run on 1 km longer passage from Kőkapu to the tourist house in Rostalló. The other end of the railway was 1.3 km extended in 1996 from Ipartelep to Pálháza.

Today the railway is only in service for tourists, it takes 40-50 thousand passengers a year. The majority of its passengers are primary school pupils during their school trips.

It is an unprecedented experience to travel on this train for both young and elderly people. Getting on the train in Pálháza you can travel to the mansion in Kőkapu, where a restaurant, refreshments and ice-cream wait for the visitor. The lake outside the mansion is a great place for relaxation.