Railway and state officials are marking the event Monday during an event at Union Station in downtown Burlington.
The family owned railroad operates more than 350 miles of track in Vermont and employs about 125 people who are considered to be part of the railroad family.
Officials are unveiling a newly painted 50th anniversary locomotive.
The Vermont Railway hauls about 25,000 cars a year with about 90 percent of its traffic serving the state's businesses.
The railroad is looking forward to the future, including the day when passenger rail service will return to the western side of the state between Rutland and Burlington.