The train was built at the beginning of 1930 in the Hannover-Leinhausen works of the German Imperial Railway "Deutsche Reichsbahn" company. The work was completed by autumn of the same year. The train was 25.85 metres (84.8 ft) long and had just two axles, with a wheelbase of 19.6 m (64 ft). The height was 2.8 metres (9 ft 2 in). As originally built it had a BMW VI 12 cylinder petrol aircraft engine of 600 horsepower (450 kW) driving a four-bladed (later two-bladed), fixed pitch wooden propeller. The driveshaft was raised 7 degrees above the horizontal to give the vehicle some downwards thrust. The chassis of Schienenzeppelin was designed aerodynamically having some resemblance to the era's popular Zeppelin airships and it was built in aircraft style to reduce weight. The interior of the railcar was spartan and designed in Bauhaus-style.On 10 May 1931, the train exceeded a velocity of 200 km/h (120 mph) for the first time. Afterwards, it was exhibited to the general public throughout Germany. On 21 June 1931, the train set a new world railway speed record of 230 km/h (140 mph) on the Berlin–Hamburg line between Karstädt and Dergenthin, which was not surpassed by any other train until 1954. The railcar still holds the land speed record for a petrol powered rail vehicle. This high speed was attributable, amongst other things, to its low weight, which was only 20.3 tonnes.
In 1939 the rail zeppelin was finally dismantled because its material was needed by the German army.
The failure of Schienenzeppelin has been attributed to everything from the dangers of using an open propeller in crowded railway stations to fierce competition between Kruckenberg's company and the Deutsche Reichsbahn's separate efforts to build highspeed railcars.