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In 1824 Edward Pease joined with Michael Longdridge, George Stephenson and his son Robert Stephenson, to form a company to make the locomotives. The Robert Stephenson & Company, at Forth Street, Newcastle-upon-Tyne, became the world's first locomotive builder. Stephenson recruited Timothy Hackworth, one of the engineers who had helped William Hedley to produce Puffing Billy, to work for the company.

The first railway locomotive was finished in September 1825. Initially called Active, it was later given the name Locomotion. The locomotive was similar to those that Stephenson had produced at the collieries at Killingworth and Heaton. The boiler of the Locomotion had a single fire tube and two vertical cylinders let into the barrel and the four wheels were coupled by rods rather than a chain.

The Stockton & Darlington Railroad was opened on 27th September, 1825. Large crowds saw George Stephenson at the controls of the Locomotion as it pulled 36 wagons filled with sacks of coal and flour. The initial journey of just under 9 miles took two hours. However, during the final descent into the Stockton terminus, speeds of 15 mph (24 kph) were reached. These increased speed surprised one man and he fell from one of the wagons and was badly injured.

In 1828 the boiler of the Locomotion exploded, killing the driver. She was rebuilt but did not perform well. The main problem was its inability to produce enough steam for a twenty-mile run. Timothy Hackworth enlarged the boiler and installed a return fire tube. This improved the performance of the locomotive but in 1827 was replaced by the Royal George. Hackworth's locomotive was mounted on six wheels, the cylinders were vertical, inverted and outside the boiler, and pistons and connecting rods drove the rear wheels.

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(1) Durham County Advertiser (1st October, 1825)

The hour of ten arrived before all was ready to start. About this time the locomotive engine, or steam horse, as it was more generally termed, gave note of preparation. The scene, on the moving of the engine, sets description at defiance. Astonishment was not confined to the human species, for the beasts of the field and the fowls of the air seemed to view with wonder and awe the machine, which now moved onward at a rate of 10 or 12 mph with a weight of not less than 80 tons attached to it.

(2) John Sykes was one of those who witnessed the opening of the Stockton to Darlington Railroad.

The train of carriages was then attached to a locomotive engine, built by George Stephenson, in the following order: (1) Locomotive engine, with the engineer (Mr. George Stephenson) and assistants. (2) Tender, with coals and water; next, six wagons, laden with coals and flour; then an elegant covered coach, with the committee and other proprietors of the railway; then 21 wagons, fitted up for passengers; and last of all, six wagons laden with coal, making altogether, a train of 38 carriages.