The building of the railway over the mountains was a major design and construction undertaking. Three possible routes for the line were investigated. A route following Bells Line of Road via Mount Tomah was discarded as it was considered too steep, and a second possible route through the Grose Valley was deemed unsuitable due to the unstable terrain. The third route was favoured by Whitton and follows the approximate route of the final line. Various methods of ascending the Lapstone Hill were suggested to Whitton including a horse tramway laid on existing roads, which the then Governor, Sir William Denison, advocated for the whole of New South Wales. Passengers would leave the tram at the bottom or top of a hill and walk up or down as required. Another suggestion, proffered by the Rev. Dunmore Lang also suggested that passengers walk up or down the hill on a long staircase while a stationary engine at the top or bottom of the escarpment lifted and lowered goods. Whitton himself would have preferred to make use of tunnels to achieve the ascent of Lapstone Hill, but was forced into compromise by the limited funds made available for the project. The little Zig Zag, presenting steeper grades than Whitton would have liked, and Knapsack Viaduct resulted. (Rowland, 1954, pp. 249-50; Blue Mountains Historical Society Inc, Correspondence, 14 July, 2004; P. Belbin & D Burke, 1981, p. 38)

The contract for construction of the Knapsack Gully Viaduct was let to W. Watkins in March 1863, who also completed the stone piers of the Victoria Bridge at Penrith, also constructed as part of the railway project. Work was completed in 1865. The bridge was constructed of sandstone quarried in the neighbourhood, and carried a single rail line. (Palmer, n/d p. 10) The construction of the railway brought hundreds of people to Lapstone, and later, employees of the railways to service it. The construction workers camped near their work sites, often with their families, although the exact locations of the camps are not known. (Aston, 1988, p. 12)

Traversing the Lapstone Zig Zag by train was a distinctive experience. Ascending or descending, the trains travelled forward on the top and bottom 'roads' and backward on the middle one; at each junction the train paused in a 'Dead End' and a set of points were changed. The gradients on the hill were steep and C.C. Singleton of the Australian Railway Historical Society records the memory of a train driver descending the hill, 'wooden brake blocks ablaze and the engine in back gear'. In March 1886 a train lost control on the descent and 15 were injured. The buffer system and Zig Zag junction points were altered in an attempt to prevent a reoccurrence. The Railway Guide of New South Wales, 1879 described the journey toward the viaduct from Penrith, and then the structure itself, rather more romantically, 'the Railway may be seen winding upwards - past huge rocks and steep declivities, alternating with dense woods; the noble viaduct across Knapsack Gully being hence already distinguishable . . . You have by this time arrived at the Knapsack Gully Viaduct - boldly erected across a steep and stony gorge by the genius of the Engineer in Chief, John Whitton. This admirable and imposing structure (which Imperial Rome . . . might have been proud to claim) consists of seven successive arches'. Nell Aston in 1988 imagined the view from the train as it crossed the Knapsack Viaduct before ascending the Zig Zag writing, 'it must have seemed like flying'. (Singleton, 1956, p. 124, Aston, 1988, p. 21, The Railway Guide of New South Wales, 1879, p. 34)

The completion of the rail line made trips to the mountains comparatively quick and easy for Sydneysiders, and many built 'weekenders' in the lower mountains which overlooked Sydney and enjoyed fresh mountain air. (Aston, 1988, p.11) The Blue Mountains area was generally opened up to development, and the rail line revolutionised transport of people, goods and supplies between Sydney and the agricultural areas developing to the west of the range, the railway reaching Bathurst in 1876.

The viaduct fell into disuse in 1913 on completion of the Glenbrook Gorge Deviation, to the south of the zig-zag, which incorporated a similar viaduct and followed an easier gradient. In 1926, after over a decade of disuse, the Knapsack Viaduct was taken over by the Main Roads Board. The Board sought to improve on the steep gradients of the Great Western Highway between Emu Plains and Blaxland and found that a suitable line was presented by part of the old zig-zag railway formation, including the Knapsack Gully Bridge. The viaduct's carriageway was widened from the original sixteen to eighteen feet by trimming back the inside face of the stone parapets. The new road was opened by Governor Sir Dudley de Chair on 23rd October 1926 (Blue Mountains City Library, photo file: PF 354/1 and P/F 354/3; Main Roads Journal, May 1939, pp. 92-4, Main Roads Board Annual Report, 1926, p. 21)

The viaduct was widened in 1939, with the construction of a reinforced concrete cantilevered deck, designed to be aesthetically sympathetic to the original structure, to accommodate increasing traffic volumes. The widening was undertaken by contractor Hardy Davis, Ltd. (RTA File 5/44.11221 Part 2, Main Roads Journal, Vol. 10, No. 1, November 1938) Further widening of the bridge was considered in the late 1970s, but the construction of a sympathetic parallel structure at some distance from the bridge was considered greatly preferable (RTA File 5/44.11221 Part 2)

The deviation of the Great Western Highway (M4 Motorway) around the gully relieved the structure of the burden of traffic in June 1993. Penrith Council, the Roads and Traffic Authority and the Federal Government collaborated to adapt the area for tourist access to the Viaduct so that it might be viewed and appreciated by the public. In 1995 the bridge was reopened along with the John Whitton Memorial Reserve, by Member for Macquarie, Maggie Deahm (Penrith Press, 12th December, 1995).