Trainworks is located in Thirlmere – approximately 90km from Sydney – and is one of the main features of the village. Thirlmere, like many towns, was born with the coming of the Great Southern Railway in 1863 to 1867, when a large temporary tent city grew up to house the railway workers. It was valued for its proximity to Thirlmere Lakes which provided water for the steam trains. The water was pumped to a siding at the nearby town of Couridjah.
The Thirlmere section of the Main Southern Railway was deviated in 1919 to a less steep alignment with easier grades, and the original line became the Picton Loop Line. Today, the Loop Line provides a link to the main line which enables heritage trains to operate beyond the local area and to run on a line clear of other working trains.