Work began in 1793, but errors by contractor left a wiggle in the tunnel, and after three years work it collapsed due to quicksand, claiming the lives of 14 men. It was then decided to begin again with a new tunnel.
By the time the rest of the Grand Junction Canal had opened between London and Braunston, Northamptonshire in 1800, apart from the crossing of the River Great Ouse, the section of canal from Blisworth to the lower end of Stoke Bruerne locks was the only section unfinished. This was despite the tunnel having been under construction for seven years: the gap was filled by a temporary horse-drawn tramway over the top of the hill, with goods being transported from boat to wagon and back again. The tramway, built in 1801, was Northamptonshire's first railway. In March 1805, the tunnel was finally opened and the rails were used to connect the main line of the canal to the River Nene until the branch canal to Northampton was constructed.
There was some major rebuilding of the tunnel in the 1980s, with sections lined with pre-cast concrete rings. It was also used to test out the materials that were later used on the Channel Tunnel. One of the unused rings is on display just outside the south portal