Railway Watch & Ward was established in the year 1925 as part of the Railway Department. This organization was mostly headed by the officers from Railway service and some time from provincial police on deputation with Railway. The prime function of Railway Watch & Ward was prevention of theft, pilferage, misappropriation, protection of Railway installations against sabotage and safe transportation of goods in transit through Railway in the country. Watch & Ward was headed by Chief Superintendent, an officer from Police of the rank of DIG on deputation. The incidents of crime pertaining to Railways were registered, investigated and prosecuted by the Provincial Railway Police known as Government Railway Police. A post of Deputy Inspector General of Police (Railways) was created for entire West Pakistan with its Headquarters in Lahore, and under him, two posts of Superintendents of Police (Railways)-one at Lahore and one at Karachi were created. The jurisdiction of former included the erstwhile Provinces of Punjab and NWFP, while that of the latter included the areas of Sindh and Balochistan. After the dissolution of one Unit, in June 1970, the Railway Police reverted to its previous form. The post of DIG (Railway) was abolished and an AIG, Railway Police (of SP's rank) was appointed in the Punjab. In Sindh, the Railway Police was headed by a Superintendent, Railway and in NWFP and Balochistan by Deputy Superintendents of Police. Duality of above system created its own problems and resulted in jurisdictional disputes.

The In charge of Watch & Ward was of the view that he being a part of the Railway department is more answerable and responsible to the senior than the outsider Police Officer. Whereas outsider Police Officer did not feel worthwhile to coordinate well with the In charge Watch & Ward Organization regarding investigation and the prosecution of the cases. This dichotomy caused many security weaknesses in the years to come. In order to bring harmonious blend, which is pre-requisite of an efficient Railway service, Watch & Ward department and the Railway police were decided to be merged into a new force called as Pakistan Railways Police.

The Federal Government realizing the issue, proposed a constitutional Bill to the National Assembly and Senate for the creation of Federal Railway Police, which was approved by the Hon’ble President of Islamic Republic of Pakistan, Railway Police Ordinance, 1976 was promulgated and subsequently enacted as PRP Act 1977.

Hence, Pakistan Railways Police (Federal law enforcement agency) was constituted in 1977 as a legal entity and by framing its rules, the former Watch & Ward was merged into it.