This historic mining town, elevation 2,600 feet (788 m), was named after primitive mule-drawn ore cars used here. There was never actually a railroad here. The town was established in 1849. It was the site of an Indian council as well as the center of rich placer and quartz mining. Its largest producer was the Petticoat Mine. The post office was established in 1857, closed in 1858, and re-established in 1869 and the Edwin Taylor store built in 1867. The town's population was decimated in 1880 by black fever.
The Clark Reservoir was created when an engineer named W.V. Clark constructed a ditch from the Mokelumne River, as there was not much water to work the placers. The reservoir, located on his property, supplied water to the mines and to the town.
The town is registered as California Historical Landmark #286.
According to the United States Census Bureau, the CDP has a total area of 33.0 square miles (85.5 km²), of which, 32.8 square miles (85.1 km²) of it is land and 0.2 square miles (0.4 km²) of it (0.48%) is water.
As of the census of 2000, there were 549 people, 240 households, and 150 families residing in the CDP. The population density was 16.7 people per square mile (6.5/km²). There were 326 housing units at an average density of 9.9/sq mi (3.8/km²). The racial makeup of the CDP was 92.17% White, 0.18% Black or African American, 1.46% Native American, 0.91% Asian, 0.18% Pacific Islander, 1.82% from other races, and 3.28% from two or more races. 5.28% of the population were Hispanic or Latino of any race.
There were 240 households out of which 20.0% had children under the age of 18 living with them, 47.9% were married couples living together, 9.6% had a female householder with no husband present, and 37.1% were non-families. 26.7% of all households were made up of individuals and 10.0% had someone living alone who was 65 years of age or older. The average household size was 2.29 and the average family size was 2.72.
In the CDP the population was spread out with 19.5% under the age of 18, 5.8% from 18 to 24, 21.1% from 25 to 44, 35.3% from 45 to 64, and 18.2% who were 65 years of age or older. The median age was 47 years. For every 100 females there were 99.6 males. For every 100 females age 18 and over, there were 94.7 males.
The median income for a household in the CDP was $35,938, and the median income for a family was $35,278. Males had a median income of $32,083 versus $28,750 for females. The per capita income for the CDP was $18,454. About 6.7% of families and 18.4% of the population were below the poverty line, including 24.7% of those under age 18 and 6.0% of those age 65 or over.
In the state legislature Rail Road Flat is located in the 1st Senate District, represented by Republican Dave Cox, and in the 25th Assembly District, represented by Republican Tom Berryhill. Federally, Rail Road Flat is located in California's 3rd congressional district, which has a Cook PVI of R +7 and is represented by Republican Dan Lungren.