An extension of the railway north from the Great Western Railway (GWR) terminus at Oxford towards Birmingham and Wolverhampton were proposed by three railways in 1844-6. These three railways were the Oxford & Rugby Railway, Birmingham & Oxford Junction Railway and the Birmingham, Wolverhampton & Dudley Railway. The three proposals were initially supported by the directors of the Grand Junction Railway, who wanted an independent standard gauge line to London rather than use the London & Birmingham Railway, with which they were in dispute. However, by 1846 the Grand Junction Railway, together with the Manchester & Birmingham Railway, had merged with London & Birmingham Railway to form the London & North Western Railway (LNWR). The LNWR adopted an aggressive approach in dealing with competing railways, including opposing the construction of the line between Oxford and Birmingham.
The issue of gauge caused much delay in obtaining the necessary Acts of Parliament, and, short of money, the three railways agreed to lease their lines to the GWR. Shortly thereafter the three companies were amalgamated into the GWR. Separate Acts were obtained for each section of line. While the GWR eventually succeeded in fighting off the LNWR opposition, it was at the expense of having to build the line to both broad and standard ("mixed") gauge so that the LNWR could exercise running rights over the line. In fact, the LNWR never built the proposed connecting branches to enable it to exercise its running rights, and probably never intended to do so.
The Oxford & Rugby Railway Act was approved first, and a single track broad gauge line between Oxford and Banbury was opened on 2 September 1850, after an unsuccessful attempt by the LNWR to halt the opening because the standard gauge rail had not been added as required by the Act. Construction of the final section of the Oxford & Rugby Railway line to Rugby was abandoned, and the railway formed an end-on junction with the Birmingham & Oxford Junction Railway just north of Fenny Compton. The line was opened between Birmingham and Oxford on 1 October 1852, by which time the Oxford to Banbury line had been doubled and the gauge mixed as required by the Act.
The broad gauge extension to Wolverhampton was opened on 14 November 1854.
In the meantime, the LNWR's sharp tactics against smaller competing railways had forced the Shrewsbury & Birmingham Railway and Shrewsbury & Chester Railway to seek a merger with the GWR. These two railways consisted of 76 miles of standard gauge line opened between 1846 and 1849. Both railways became part of the GWR on 1 September 1854.
Another standard gauge railway in which the GWR was a major shareholder, and which should have been built to the broad gauge under the terms of its Act of Parliament, was the Oxford, Worcester and Wolverhampton Railway. In 1860, this railway merged with other neighbouring standard gauge lines to form the West Midland Railway, which in turn was taken over by the GWR in 1863. The combined traffic from these standard gauge lines needing access to London required the GWR to extend the standard gauge rail from Oxford into London Paddington in 1861, signalling the start of the end of the broad gauge. The last broad gauge train to operate north of Oxford was on 31 March 1869.