The Chesapeake and Ohio Canal, abbreviated as the C&O Canal and occasionally called the Grand Old Ditch, operated from 1831 until 1924 along the Potomac River between Washington, D.C., and Cumberland, Maryland. It replaced the Patowmack Canal, which shut down completely in 1828, and could operate during months in which the water level was too low for the former canal. The canal's principal cargo was coal from the Allegheny Mountains.

Construction began in 1828 on the 184.5-mile (296.9 km) canal and ended in 1850 with the completion of a 50-mile (80 km) stretch to Cumberland, although the Baltimore and Ohio Railroad had already reached Cumberland in 1842. The canal had an elevation change of 605 feet (184 meters) which required 74 canal locks, 11 aqueducts to cross major streams, more than 240 culverts to cross smaller streams, and the 3,118 ft (950 m) Paw Paw Tunnel. A planned section to the Ohio River in Pittsburgh was never built.

The canal is now maintained as the Chesapeake and Ohio Canal National Historical Park, with a trail that follows the old towpath.

After the American Revolutionary War, George Washington was the chief advocate of using waterways to connect the Eastern Seaboard to the Great Lakes and the Ohio River, which flows into the Mississippi River and ultimately to the Gulf of Mexico at New Orleans. In 1785, Washington founded the Potowmack Company to improve the navigability of the Potomac River. His company built five skirting canals around the major falls: Little Falls, which was later incorporated in the C&O Canal, Great Falls in Virginia, Seneca Falls opposite Violette's lock, Payne's Falls of the Shenandoah, and House's Falls near Harpers Ferry. These canals allowed an easy downstream float; upstream journeys, propelled by pole, were harder.

Several kinds of watercraft were used on the Patowmack Canal and in the Potomac River. Gondolas were 60 by 10 ft (18 by 3 m) log rafts, usually sold at journey's end for their wood by their owners, who returned upstream on foot. Sharpers were flat-bottomed boats, 60 by 7 ft (18 by 2 m), usable only on high-water days, about 45 days per year.

The Erie Canal, built between 1817 and 1825, threatened traders south of New York City, who began to seek their own transportation infrastructure to link the burgeoning areas west of the Appalachian Mountains to mid-Atlantic markets and ports. In 1820, plans began being made for a canal to link the Ohio River and Chesapeake Bay.

In early March 1825, President James Monroe signed the bill chartering the construction of the C&O Canal as one of the last acts of his presidency. The plan was to build it in two sections, the eastern section from the tidewater of Washington, D.C., to Cumberland, Maryland; and the western section over the Allegheny Mountains to the Ohio River or one of its tributaries. Free from taxation, the canal company was required to have 100 miles (160 km) in use in five years, and to complete the canal in 12 years. The canal was engineered to have a 2 miles per hour (3 km/h) water current, supplying the canal and assisting mules pulling boats downstream.

The eastern section was the only part to be completed.