Shay locomotives were developed by Ephraim Shay. His first successful engine that we would recognize today as a Shay locomotive was produced in 1880 by Lima Machine Works (later, Lima Locomotive Works), who would go on to produce approximately 2,700 up until 1945, when production ceased.

Shay locomotives are unusual in that they are powered by a steam engine of either two or three cylinders mounted vertically near the cab on the right side of the locomotive (although there were a very few with the engine on the left). The boiler was offset on the frame to counterbalance the weight of the engine. The engine drove a drive shaft that, through flexible couplings, turned bevel gears that engaged the wheels. This type of engine is known as a geared engine, since the wheels turn at a different rate from the engine, due to the gear ratio. This arrangement made the engine very flexible and able to negotiate raggedy track without derailing. Because of this characteristic as well as its great power, it was an exceeding popular engine with logging companies and other industries that relied on tough engines in unforgiving situations.