In 1869 the Central Pacific Railroad (now Southern Pacific) completed a rail line through the area which is now Tracy. The rail line ran from Sacramento through Stockton then over the Altamont Pass and then by ferry service to San Francisco. Shortly after the line was built, a new town sprung up nine miles from Stockton and became known as Lathrop Junction. Lathrop consisted of a roundhouse, railroad shop, yards and hotels for feeding railroad employees. The community became the center of railroad business and the headquarters for the Central Pacific Railroad in the San Joaquin Valley.

The railroad found it necessary to build a coaling station at the base ofthe Altamont Pass, just fourteen miles to the west of Lathrop. The new station was called Ellis and by 1870 it had about 45 buildings serving the needs of the railroad and its employees and their families.