On 19 June 1886 Frederick Francis III, Grand Duke of Mecklenburg granted a licence for the construction and operation of a narrow gauge railway from Doberan station to Heiligendamm, this first section going into operation on 9 July 1886. It was built by the private railway construction and operating company of Lenz & Co. from Stettin (now "Szczecin") and run by the Doberan-Heiligendamm Railway (DHE). Services on the 6.61-kilometre-long route, which was worked by a steam tram and later classified as a light railway or "Kleinbahn", initially only ran during the summer season from 1 May to 30 September. On 13 March 1890 the Grand Duchy of Mecklenburg-Schwerin nationalized the line and incorporated it into the Grand Duchy of Mecklenburg Friedrich-Franz Railway.