The canal system was dug mostly by hand, mostly by Irish immigrants. Work began in 1830 and was completed in 1834. When the canal first opened, teams of mules were used to tow canal boats through it (the steam engine had not yet been introduced). The canal's greatest usage occurred during the 1860's and 1870's, when it was used primarily to transport coal from Pennsylvania to New York City, which had entered the Industrial Revolution. Over time, the importance of the D&R Canal waned as railroads were used to perform, more rapidly, the same function as canals, but it remained in operation until 1932.
In 1974, most of the canal system was declared a state park. It remains one today, and is used for canoeing, kayaking, and fishing. A graded natural-surface trail along the canal is used for hiking, jogging, bicycling, and horseback riding.
When the canal was used for transportation, New Jersey's landscape was mostly rural, and its primary business was agriculture. "Now," in the words of Howard Green, research director of the New Jersey Historical Commission, "it is one of the most beloved parks in the state, a sinewy, snake-like greenway through one of the most heavily populated parts of the world. It has gone from being the machine in the garden, to being garden in the machine."