The Grand Junction was London's principal link with the rest of the UK's canal system and provided the transport infrastructure to bring goods from the industrial north and midlands to London. Work started on its construction in 1793. The famous canal engineer William Jessop played a superintendent role as Chief Engineer, with James Barnes as the engineer responsible for most of the construction work. The Company's chairman was William Praed.

The initial plan was to link Braunston in Northamptonshire (where there were other canal connections to Birmingham and the north) with the river Thames at Brentford. This would have served central London only via the river. In 1794, long before the main line was complete, the company had the idea of a branch or "arm" from Bull's Bridge in west London to Paddington. The Paddington Arm opened on 10 July 1801, terminating in a 400 yard long basin, 30 yards wide, around which were wharves, a hay and straw market, sheds for warehousing, and pens for livestock. The Paddington Arm was a success and Paddington was soon a busy inland transhipment point, with goods being carried on to other parts of London on carts.

There was also a passenger boat service between Paddington and Uxbridge, the Paddington Packet Boat. Initially run by the company itself, with some success, the passenger boat service was let out. The packet boat crews were noted for their smart crews wearing blue uniforms with yellow capes and yellow buttons. The Paddington packet seems to have been a well used passenger service which continued for a number of years.

The Grand Junction was a busy route throughout its commercial life, although it was in competition with the growing railways from the mid-1800s onwards. On 1 January 1929, the Grand Junction, Regent and Warwick Canal companies merged, forming the Grand Union Canal Company. In the 1930s, the Grand Union Canal Company worked to modernise both the canal and the boats operating on it. The company had a wide beamed motor barge built, the Progress, as an experiment with the intention of achieving greater efficiency to compete with railways and the growing alternative of road transport. They also tried out new designs of motor narrowboats which could pull an unpowered "butty". The Progress was not a success but the new designs of narrowboat were, and a large fleet was built for the Grand Union Canal Carrying Company, a subsidiary of the Grand Union Canal Company.

Nationalised along with other canals in 1948, the Grand Junction route was one of the last in Britain to keep commercial traffic alive, albeit in steep decline through the 1950s when road transport developed considerably. It has always remained open to traffic and is now well used by leisure craft.